Middlesea Insurance plc names new chairman

Middlesea Insurance plc has appointed Joseph F.X. Zahra non-executive chairman designate after executive chairman Mario Grech informed the board he would not renew his contract which expired last Thursday.

Mr Grech said: "I retire from Middlesea with nothing but goodwill for the group and its future," adding he would do his utmost to ensure a smooth transition. The board was also informed that Mr Grech, who holds senior positions within the group's subsidiaries, would remain available to assist in an advisory capacity.

The outgoing chairman has given 25 years' service to the group and has been instrumental in building Middlesea into Malta's leading insurance organisation. He is synonymous with the business, education and training of insurance in Malta.

Last year has been especially challenging for him. In December, the group launched a €40.2 million rights issue to boost its capitalisaton after suffering "unprecedented strain" from the results of its Italian subsidiary Progress Assicurazioni SpA. The company, of which Mr Grech is president, made a loss of €29 million up to the third quarter of the year.

Middlesea Insurance plc's books are this year projected to be hit by the €21 million cost of right-sizing the loss-making Italian operation.

Over €40 million in re-insurance has been acquired at a cost of €14 million to cover claims between 2000 (the year Middlesea acquired the company) and 2008 to mitigate the effect on MSI's bottom line. More than €7 million in indemnity was paid to Italian agencies whose contract was terminated this year.

Mr Zahra's appointment is subject to regulatory approval.

An extraordinary general meeting will be held in the new few weeks to propose further amendments to the memorandum and articles of association of the company.

The amendments aim to better reflect the new shareholding structure following the rights issue and to implement certain changes in the group's governance.