Decisions on Middlesea Italian operation this year

The considerable loss incurred by Middlesea Insurance plc Italian subsidiary Progress Assicurazioni in 2008 and the immediate future challenges emerging in the Italian market, require important decisions being taken on future direction, executive chairman Mario C. Grech told the annual general meeting at the Malta Hilton last Friday.

"These decisions will need to be made by the board of directors before the end of this current year," he emphasised, adding that the board was currently examining the group's structure looking ahead at the long term needs of the business.

Middlesea Insurance plc operates mainly in the local market and is a holding company of a group that has interests in Italy. It has a large investment in Middlesea Valletta Life Assurance Co. in partnership with Bank of Valletta, an insurance management services arm (IIMS), and some property holding companies.

Mr Grech explained that this structure was not so designed when Middlesea Insurance plc was founded, but evolved into its present structure.

The process to propose restructuring to the shareholders for their consideration had begun. The envisaged change, which would first require various regulatory approvals, would not impact the shareholders' interests but rather enhance management focus and business flexibility.

"During 2008, the group continued to focus on future challenges that arose continually from market forces and increased statutory and regulatory requirements. The future direction of our subsidiary, Progress, together with the group restructuring will be our priority in 2009," Mr Grech pointed out.

Roderick Chalmers, Tonio Depasquale, John C. Grech, Andrez Jimenez Herradon, Michael Sparberg, Javier Fernàndes-Cid and Joseph F.X. Zahra were appointed to the board by the three shareholders holding more than seven per cent of the company's shareholding.

As the number of nominations did not exceed vacancies, nominees George Bonnici, Evelyn Caruana Demajo, Gaston Debono Grech, Victor Galea Salomone and Lino Spiteri were automatically appointed directors.

The meeting approved the shareholders' proposal to decrease €1,000 from the amount due as emoluments to directors. The shareholders approved a resolution that the maximum annual aggregate emoluments of directors be fixed at €349,000.

The new board appointed Mr Grech executive chairman and Mr Chalmers deputy chairman.

Middlesea Insurance plc registered a loss after tax of €20.6 million for the year ended December 31, 2008, compared to a profit of €9.3 million in 2008. The loss was mainly attributed to the impact of the global economic crisis on group operations and the considerable technical loss by Progress Assicurazioni. The board did not recommend a dividend.