25 November - 1 December 1999

Middle Sea acquires majority shareholding in Spanish insurance company

by Anthony Manduca

Middle Sea Insurance and Corporacion Mapfre, a Spanish company, have agreed to join efforts in Mapfre Progress, a non-life insurance company based in Palermo, Sicily, and operating in Sicily and southern Italy.

Under the "Heads of Agreement" and subject to the approval of the relevant authorities and due-diligence, Middle Sea will acquire a majority share in Mapfre Progress, partly by subscribing a new capital issue by the Sicilian company. Mapfre will remain a minority shareholder in the company and will also hold a small percentage of Middle Sea Insurance shares.

Management responsibility in Mapfre Progress will be taken over by Middle Sea immediately after the transfer of shares is approved and completed. Middle Sea plans to develop and diversify the company's portfolio as part of their inter- national investment plans in Mediterranean countries.

Middle Sea is the leading Maltese life and general insurance group. As at June 1999 Middle Sea assets increased to US$104m with an annual premium income of US$21m. Middle Sea holds 51 per cent shareholding in Middle Sea Valletta Life Assurance which had US$96m assets and premium revenue of US$24m. Since 1987, the holding company has been active in reinsurance through its branch office in the London Underwriting Centre.

Mapfre is the leading Spanish life and non-life insurance group, headed by Mapfre Mutualidad. The group had consolidated revenues of US$5bn in 1998, and consolidated net income of US$142m.

Mapfre's direct international insurance strategy is oriented in the first place towards Latin America, where it has operations in 12 countries. The group is internationally active in reinsurance (Mapfre Re) and in travel assistance (Mapfre Asistencia). Corporacion Mapfre is a holding company which regroups Mapfre Mutualidad's subsidiaries.