NEWS | Wednesday, 22 August 2007

Middlesea Group registers a 55% improvement in pre- tax Profits

The Middlesea Group results for the first half year of 2007 have been positive, with profits before taxation amounting to Lm1.93million (€4.5m), reflecting an increase of 55% over the profits of Lm1.24 million (€2.89m) registered last year.
Commenting about the Company’s results, Middlesea Group Executive Chairman Mr Mario C. Grech stated: “Technical insurance results before investment income have shown positive upwards movements in both the Maltese and Italian operations.”
The profit attributable to shareholders as at the end of June 2007 amounted to Lm1.16 million (€2.70m), compared to Lm1.55 million (€3.61m) last year. The technical result on general business of the Group, before allocating investment income, which was also favourably impacted by the effect of a net positive run-off amounting to Lm0.7 million (2006 – Lm0.2m) from the Malta operations, improved from Lm0.30million (€0.7m) to Lm0.67million (€1.6m). Business underwritten in Malta and Gibraltar during the first six months of 2007 amounted to Lm7.7million (€18.04m), an increase of 6.6% over the same period in 2006.
The premiums written by the Group increased by Lm3.89 million (€9.06m), from Lm18.67 million (€43.49m) in 2006 to Lm22.56 million (€52.55m) this year. The combined operational ratio for General Business, with the total technical charges as a percentage of net earned premium, reduced from 98.1% in 2006 to 95.7%. The overall rate of return for general business, after allocation of investment income to premiums written, was 8% as compared to 4.3% in 2006. Total assets, which include investments of Lm94.07 million (€219.12m), amounted to Lm126.3 million (€294.2m), compared to Lm118.17 million (€275.26m) in 2006.
Progress Assicurazioni S.p.A., has continued to pursue its strategy of expanding its distribution network, with the number of agencies increasing to 155 at the end of June. Premium written increased by Lm3.4 million (€7.92m) to reach Lm14.44 million (Lm33.64m) and the contribution of this subsidiary towards the profit before tax has increased to Lm1.0 million (€2.33m).
Business written by associate company Middlesea Valletta Life Assurance Co. Ltd (MSV) has also increased from Lm26.62 million (€62m) last year to Lm 29.21 million (€68m) this year and the contribution for the six months up to 30th June 2007 remains satisfactory at Lm0.39 million (€0.91m). Whilst this Company has continued to experience growth in the Maltese market, it is pursuing its plans to enter the Italian life assurance market.
The Group’s gross technical reserves reflect an increase of 8.8% over last year and the ratio of net technical reserves to annualised net premium written remains strong at 158%. The net asset value per 25c share, after taking into account the dividend approved by the shareholders during the Annual General Meeting held on the 28th June 2007 amounts to Lm1.35.
The negative capital returns on equities and bonds listed on the Malta Stock Exchange and on foreign bond markets continued to impact the investment income earned by the local companies within the Group. However these were mitigated by the positive returns earned on foreign equity markets. The foreign market equity returns have contributed to the increase in the overall investment income earned amounting to Lm1.3 million (€3.03m) when compared to that earned during the same period in 2006 amounting to Lm0.77 million (€1.79m).