Mr. J.F.X. Zahra, Chairman of Middle Sea Valletta Life Assurance Co. Ltd, announced that the Company registered firm growth during 2000.
This was reflected in the total Gross Premiums which, in 2000, increased by 50% to Lm20.2 million (US$44.6m). Funds invested at 31 December 2000 amounted to Lm65million (US $143m), an increase of 27% from Lm51million (US $123.7m) last year. Profits before taxation reduced to Lm0.4m (US$.9m). The Net Asset Value as at 31 December 2000 was Lm2.69, an decrease of 3 cents (1.1%) from last year.
Mr. Zahra stated that “The year 2000 was marked with volatility in the local and international capital and investment markets, and this had an effect on the overall investment return of the company. Appreciably, this situation has had a negative impact on the company, and this is reflected in the reversionary bonuses as at 31 December 2000. The investment scenario also affected the company’s results with a reduction in the Profit before tax when compared to performance achieved as at 31 December 1999”.
The Board of Directors approved a resolution whereby the reversionary bonus declared on the Comprehensive Life Policy and on The Comprehensive Flexi Plan as at 31 December 2000 was of 5.75% of the policy account. On the ‘Old Series’ endowment and whole of life policies a reversionary bonus of 3.75% of the basic sum assured plus bonuses was declared as at 31 December 2000. No Terminal Bonus has been declared for policies on claims arising out of death or maturity during 2001. However, any Terminal Bonuses declared on the ‘Old Series’ accumulated over previous years to-date shall remain payable on such claims occurring in 2001. Furthermore, the Board also approved a reversionary bonus of 4.75% on The Secure Growth policies that were part of the portfolio of business transferred from Assicurazioni Generali S.p.A. during 2000.
Mr. Mario C. Grech, Deputy Chairman & CEO, in the bonus declaration of last year had “cautioned that the Company’s bonuses reflect the returns earned on the underlying investments which, to a large extent, depend on investment opportunities and results from capital markets locally and internationally”. He had further stressed that, “more than ever, past performance is no guarantee for the future and therefore future bonus declarations could also go down”. Mr. Grech had stated that whereas the excellent investment performance in 1999 reflected an increase in the bonuses declared as at 31 December 1999, the poor investment returns achieved during 2000 directly affected this year’s bonus levels. The Company aims to achieve a fair and equitable distribution of profits between the different generations and types of “with profit” policies and shall continue to endeavour in the smoothening of future bonus declarations and the provision for terminal bonuses, even though the latter bonuses are not guaranteed.
The investment performance was also reflected in the Company’s operational results, which decreased by 84% from those of last year. Mr. Grech confirmed the Company’s commitment to continued growth. This is reflected in the premium increases achieved during 2000 as compared to those of the previous year. Nevertheless, Mr. Grech reiterated his statement made last year that “…it is unlikely that the reversionary bonus rates will re”.