After registering a pre-tax group profit of just under €18 million last year, Middlesea Insurance plc expects a positive performance in 2013 despite one of its former agencies evolving into a new competitor.
The company grew its market share to 24.97 per cent last year
The new player, Allcare Insurance, previously made up 18 per cent of Middlesea’s non-life portfolio. Middlesea expects to retain some clients but continues to focus its efforts on reinforcing its own distribution channels further.
“The topline impact (of the Allcare development) could be more significant than the bottom line impact, and the rest of the distribution channels are doing very well,” Middlesea president and chief executive officer Alfredo Muñoz told The Sunday Times. “After Allcare’s departure from our portfolio, the agencies and brokers will be relatively similar in weighting. We are also seeing an increasing number of tied insurance intermediaries coming on board.”
Middlesea has named a chief officer to take responsibility for the company’s distribution channels, who will be in closer contact with the market with a view to facilitate access to the company’s offering.
Middlesea grew its market share to 24.97 per cent last year from 23.19 in 2011; preliminary figures for the year issued recently by the Malta Insurance Association reveal Middlesea enjoyed a growth rate of 11 per cent in non-life business in 2012.
Mr Muñoz is confident Middlesea will continue to experience growth, thanks to the capabilities afforded by its size, and the support of the Mapfre Group, the Spanish insurance giant of which it forms part.
Middlesea, he explained, was able to bear the fixed cost that came with offering customers added value features with its products. Mapfre’s support, particularly where reporting tools are concerned, will be critical in meeting the compliance requirements which will be imposed by the upcoming Solvency II Directive.
Last year, Middlesea revamped its traditional home, motor and travel products and introduced a suite of cover options for marine customers at competitive pricing. The company’s differentiator is the range of local and international assistance services it is able to offer to policy holders. Middlesea plans to extend these services further and the call centre’s remit will be widened.
Middlesea acquired de facto control over MSV Life plc in July 2011, essentially making the life company a subsidiary. The group’s 2012 results include the consolidated MSV results of €15.98 million. MSV reported a decrease in turnover of €87.3 million compared to €128 million the previous year as a result of lower demand for single premium business. New sales of the protection and regular savings policies were positive compared to previous years. The upturn in equity and bond markets allowed net investment income to rocket from €8.1 million in 2011 to €95.4 million in 2012.
“MSV’s turnover premium last year was hit by a low appetite for risk,” Mr Muñoz said. “The regular business increased but the single premium products were not sold in the same proportion as before. The bonuses for last year were up, however, and these products are a good alternative for investors in the local market.”
Mr Muñoz added that Middlesea’s insurance management arm, Bee, was also performing well. The management team has been strengthened, the portfolio retained and new prospects are in the pipeline.