Middlesea Insurance said today that it made a loss of €55.2 million in the year which ended on December 31, its performance having been negatively affected by the losses made by its Italian subsidiary Progress Assicurazzioni spa. The figure is inclusive of the impairment charge on Progress of €63.1m. Middlesea made a loss of €20.6m in 2008.

"During the first part of 2010 important steps were undertaken in connection with this subsidiary with the result that Middlesea Insurance has now put Progress and its losses behind it," the Group said.

"The Board is also advised that as Middlesea has fully paid up the amount of share capital in Progress underwritten by it, no further payments can be requested from Middlesea shareholders," it added.

The domestc operations of the group, generated a total profit before tax and impairment charges of €8.7 million last year, compared to a loss of €2.98 million in 2008, Middlesea said.

"Notwithstanding the substantial loss taken by the group on Progress, Middlesea remains a financially strong company with shareholders' equity at December 31 2009 of over €48 million on a consolidated basis," Middlesea said.

It said that Middlesea Valletta Life Assurance, which is an associate company, reported a considerable increase in profitability during 2009.The group's share of profit from this company amounted to €3.1 million compared to €0.96 million in 2008.

Chairman Joseph FX Zahra said the loss was bad news but the good news was that Progress Assicurazzioni was history.

The shareholders had backed the company even through the bad times and although the number of small shareholders had gone down from 39 to 18 per cent, there was an increase in the institutional shareholders from 61 to 82 per cent.

Mr Zahra said that forecasts for this year were positive. He said that investigations into Progress Assicurazzioni were still ongoing but they werein the hands of the liquidator. Malta, he said, was still under insured.