The acquisition of Allcare’s business by Mapfre Middlesea has been completed, just over two months since the intention to do so was announced.
Allcare ceased to carry out insurance business last Friday. Mapfre Middlesea is taking on Allcare’s employees, according to the company’s announcement.
For over 25 years, Allcare was the main agent for Middlesea Insurance, as it then was. In 2012, it obtained a licence to act as an insurance company itself, so Middlesea lost 18 per cent of its non-life portfolio. By the first half of 2013, it had already reported a drop in premiums of 11.8 per cent.
Mapfre Middlesea president and CEO Alfredo Munoz told the Times of Malta last May that the brokerage company was not part of the deal and no rebranding or capital injection would be required.
Losses eroded the capital requirements of €3.7 million
Allcare was owned by La Laguna – belonging to Eric Schembri’s family – (55 per cent), the Tumas Group (25 per cent) and Global Management Services – belonging to Alfred Mifsud – (20 per cent).
It made a loss of €551,476 in 2013, notwithstanding premiums of €6.8 million. As the losses eroded the capital requirements of €3.7 million, the shareholders – the Schembris forking out proportionately more – had to put more money into the company as subordinated loans. An injection of €500,000 was made in February 2014, followed by €500,000 in December 2014 and €300,000 in April 2015. Gross premiums reached €8.9 million by the end of 2014.
Mapfre Middlesea, on the other hand, reported a pre-tax profit of €15.18 million for the first six months of 2015, with gross premiums up 49.4 per cent compared to the same period of 2014.
Mapfre Middlesea said the acquisition would enhance its portfolio of general insurance business, particularly in the motor, property and health classes of business. Allcare’s Msida office will remain open for the moment but for a “limited period of time”.