On 5 March 2019, MAPFRE MSV Life p.l.c. announced the bonus rates for With Profits Plans for the year ended 31 December 2018.
A Regular Bonus Rate of 2.35% was declared on the Company’s core products namely the Comprehensive Flexi Plan (regular and single premium policies), the Single Premium Plan and on the With Profits options of the Investment Bond, Retirement Plan and the Personal Pension Plan.
A Regular Bonus Rate of 2.25% was declared on the Comprehensive Life Plan (regular and single premium policies) whilst on the ‘Old Series’ Endowment and Whole Life policies, a Regular Bonus of 1.50% of the basic sum assured plus bonuses was declared.
In addition, the Board also announced the declaration of a Final Bonus in respect of Comprehensive Life Plans (single and regular premium), Comprehensive Flexi Plans (single and regular premium) and Single Premium Plans that have been in force for more than 10 years. The Final Bonus will be paid on claims payable as a result of death or maturity between 5 March 2019 and the next bonus declaration, at a rate of 1.00% for every year in force after the 10th year of the policy. This Final Bonus will be paid on the value of the Policy Account as at the date of death or maturity.
The Board also approved a Regular Bonus of 2.25% on those Secure Growth policies which formed part of the portfolio of business transferred to MAPFRE MSV Life from Assicurazioni Generali S.p.A. during 2000. Finally the Board also approved a Regular Bonus of 0.85% on the ALICO 78 policies and a Regular Bonus of 1.10% on the ALICO 66 polices which formed part of the portfolio of business transferred to MAPFRE MSV Life in 2011 from American Life Insurance Company (“ALICO”).
The With Profits Fund stood at €1.89 billion at 31 December 2018 (2017: €1.79 billion). The Fund registered a total negative investment return of €43.1 million compared to a positive €63.9 million in 2017. This represents a negative 2.15% (after fees) net investment return compared with a positive 3.85% in 2017.
The Chairman of MAPFRE MSV Life, Mr. John Cassar White stated, “although the MAPFRE MSV With-Profits Fund is invested in a very diverse portfolio of assets and is underpinned by a rigorous and prudent investment management process, 2018 was a very difficult and unusual year for long term investors like MAPFRE MSV Life as all major assets classes globally registered negative returns. Rarely have real returns been negative across all asset classes in any year and this event happened only twice in the last 25 years. 2018 was also marked by exceptionally volatile equity markets. The S&P 500 plummeted 9.0% in the last month of the year as concerns about recession risk and the future path of interest rate hikes gripped investors − a stark contrast to the growth exuberance that characterized the start of 2018. December’s performance dragged the S&P 500 into the red for the year, marking the first negative calendar year for U.S. equities since 2008.”
Mr. Cassar White added, “the investment strategy of the MAPFRE MSV Life With-Profits Fund is to hold a diversified range of quality assets and currencies that mitigates against market risk. This asset diversification together with the robust investment management process, the quality of the asset managers engaged and the Company’s strong track record of investment management give us confidence that the Fund will continue to benefit from upturns in investment markets whilst minimizing the negative impact of increased market volatility.”
The Chief Executive Officer of MAPFRE MSV Life, Mr. David G. Curmi, stated, “the money of our With Profits policyholders is invested in the MAPFRE MSV Life With Profits Fund. With assets under management of over €1.89 billion and over 74,000 With Profits Plans in force, the MAPFRE MSV Life With Profits Fund is one of the largest managed savings funds in Malta. The size and strength of our Fund allows us to invest in a very wide range of global assets. The objective of the MAPFRE MSV Life With Profits Fund is to offer competitive long-term real returns by smoothing the peaks and troughs of day-to-day market movements whilst at the same time providing an underlying capital guarantee. This means that With Profits investments remain a good choice for investors seeking steady growth from a spread of investments over the longer term with some downside protection. In these uncertain times the benefits of smoothing and guarantees can provide advantages to With Profits policyholders over other forms of investment.”
Mr. Curmi concluded, “our wider message is that MAPFRE MSV Life With Profits policyholders have the added confidence of knowing they hold a safe, time-tested and tax-efficient investment through participation in the MAPFRE MSV Life With Profits Fund, a conservative and diversified portfolio of assets that embraces a robust investment management process and which has delivered consistent returns that compare well with those achieved from alternative investments but with relatively lower levels of volatility.”
MAPFRE MSV Life p.l.c. (C-15722) is authorised by the Malta Financial Services Authority to carry on Long Term Business under the Insurance Business Act, 1998. Investment returns can go down as well as up and the past is not necessarily a guide to future performance. Changes in the rate of exchange of currencies may also affect the value of investments.
Com. No: MMSV180319.