Middlesea Valletta Life Assurance, Malta's largest life insurance company, has registered a profit before tax for the six months to June 30 of €486,726.
The company said it saw a significant improvement in investment returns, as equity and bond markets started to regain their composure following a period of extreme volatility between September 2008 and last March.
Business written during the first six months this year amounted to €50.11m. Although this represents a reduction over the same period last year, MSV experienced an encouraging increase in demand for protection policies and regular savings plans.
The volatility in financial markets led to a lower demand for the riskier type of savings-related polices, in particular unit-linked policies. The subdued consumer confidence led to a reduction in single premium investments. The bancassurance partnership with Bank of Valletta plc continued to perform strongly and remains MSV's most important channel of distribution.
Total assets increased by five per cent from €843.02m to €883.92m, mainly thanks to an increase in the value of the investments held by MSV.
Gross investment income increased from a loss of €21.06m as at June 30, 2008, to an income of €8.20m in the first six months of this year.
Unrealised capital losses fell from €35.27m during the first six months of 2008 to €6.33m as at June 30.
MSV said it continued to adopt a very prudent long-term investment strategy to preserve the capital value of its investments.
Administrative costs also reduced from €3.03m as at June 30, 2008, to €2.79m as at last June 30. This was possible due to increased operational efficiencies.
MSV said its shareholders Bank of Valletta plc and Middlesea Insurance plc were wholly committed to maintaining a strong capital position for the company to sustain the business strategy of future growth, and to meet the new regulatory capital requirements for life companies which will come into effect next January.
Accordingly, the shareholders resolved to further increase the issued share capital of the company from €41.75m to €44.25m, with effect from August 31, through the injection of new capital. With effect from the same date, the authorised share capital of MSV will be increased from €50m to €60m.