|
 |
|
Middlesea Insurance p.l.c. held its Twenty Sixth Annual General Meeting at the Hilton Conference Centre on Thursday, 28 June 2007.
In line with Middlesea’s dividend policy of enhancing its balance sheet and ensuring future sustainability, the Meeting approved a dividend distribution of a final dividend of 4.5 cents per 25c share amounting to Lm1,125,000, an increase of 29% over last year. This amount will again be paid from the company’s untaxed account and will therefore be subject to a final withholding tax of 15% on distribution. This was the 23rd consecutive year that a dividend was declared and distributed.
Middlesea’s Executive Chairman, Mario C. Grech said that in his address last year to shareholders, whilst reporting on the extraordinary results registered in 2005, he had also cautioned that future expectations needed to be based on a prudent analytical appreciation. The inherent uncertain nature of insurance risk business, which is also exposed to cyclical movements in capital markets, presented a continuous challenge in achieving well defined objectives. The overall group result for the year ended 31 December 2006 was a profit before tax of Lm3.6 million. When one considered that the Group’s result in 2005 had been favourably impacted by an exceptional net fair value movement in investments of Lm2.2 million, mainly as a result of a sharp rise in the value of domestic equities and the favourable run-off in incurred claims of Lm1.1 million, it was reassuring to note the improvement coming through in the Group Companies’ underlying performance reflecting a strong and varied operational portfolio and the continued successful implementation of the Group’s strategy.
Membership of the European Union triggered considerable interest from international companies looking at Malta as a financial centre to register in and operate from. International Insurance Management Services, though facing strong foreign competition, was committed to offering professional management services to international companies, including insurers, reinsurers and captives. Middlesea Group believed that there were distinct opportunities in this market and continued with our endeavours to increase the portfolio of third party business.
In 2006, Middlesea’s associate Middlesea Valletta Life Assurance Company (MSV) persevered in its successful operations through its multi-channel distribution network. Demand for life assurance and investment related products in Malta increased substantially, as evidenced by the take up of various products offered by MSV. During 2006 the Company launched the 2nd tranche of its Capital Guaranteed products, through the MSV Capital Guaranteed Bond. The tranche was fully subscribed. MSV continued to experience a strong demand for savings products, with the MSV Single Premium Plan being a large contributor to the total business written by the company, at Lm50.4 million an increase of 28% over last year.
In the face of continued rating pressure, 2006 saw Middlesea looking at operational reorganisation and business model refinements. Substantial investment was made locally in the new IT underwriting system and we considered this implementation as a means of increasing client satisfaction, becoming the preferred company in our industry. Being “preferred” meant being chosen by clients on the basis of Middlesea’s ability to differentiate from the competition through the quality of advice and service, as well as through product innovation and the proximity of distribution channels to clients. Underlying this was an internal reorganisation that produced enhanced customer service leading to more opportunities for management development.
Middlesea’s direction has been based on a fundamental clear strategy of providing a broad range of products through multi-channel distribution, applying technically correct pricing, ensuring adequate reserving, pursuing growth within the projected ultimate territorial spread and portfolio mix, together with an absolute resolve to succeed. This is the generic direction adopted at Group level. Understandably, each company within the Group would then adapt and adopt its strategy depending on the market in which it is operating. |
