Middle Sea Insurance (MSI) yesterday announced a considerable loss of €29.7 million for the financial year ending 31 December 2008, compared to a profit of €9.317 million during the previous financial year ending 31 December 2007.
MSI attributed the losses to “the unprecedented world financial crisis and its effect on the performance of the investment portfolio together with the technical performance of the Italian subsidiary, Progress Assicurazioni”, which registered a €19.1 million loss during the 2008 Financial Year.
This was due to a number of reasons including “the marked deterioration in the loss ratio on the obligatory third party motor business (RCA) by 24 percentage points.
Middle Sea Insurance’s technical general business before allocation of investment income also went down almost by half, from €2.4 million in 2007 to €1.48 million last year.
Income from MSI’s long-term technical general business remained steady at €0.298 million generated last year as against €0.293 million generated in 2007.
On the other hand, total investment income for MSI plummeted from a €8.47 million profit in 2007 to a loss of €4.33 million in 2008, a difference of €12.8 million.
The company is not giving a dividend to shareholders for Financial Year 2008.
Earnings per share for MSI went down from €0.27 in 2007 to a loss of €0.74 in 2008.
The grim financial results of MSI were the latest in a series of bad news for Bank of Valletta (BOV), which has a joint venture with Middle Sea Insurance which trades under the brand name “Middle Sea Valletta Life Assurance (MSV)”, whose Financial Year ended on 31 December last year.
Sources told Business Today that although MSV did not register a loss, its results were “not exceptional” A few days ago, MSV nnounced that it had registered a profit after tax of €1.92 million for the year ended 31 December 2008, a decrease of 63 per cent over the 2007 result.
Business underwritten decreased by 19 per cent from €135.91 million in 2007 to €109.70 million in 2008, while the company’s total assets increased marginally from €832.25 million in 2007 to €843.02 million at the end of 2008.
“However, the news that BOV was financing the €60 million new catamaran for Virtu’ Ferries was a sign that the bank was still seeking new revenue streams,” the sources told Business Today.
A clearer indication will be obtained later this week when BOV publishes its half-year results for 2009 tomorrow.
Since the beginning of the year, the value of BOV shares quoted on the MSE fell by 27.975 per cent, starting at €3.471 per share and ending up at €2.500 per share.