18 - 24 May 2000

Substantial growth by Middle Sea Valletta Life

by a staff reporter

The chairman of Middle Sea Valletta Life Assurance Co. Ltd, Joseph Zahra, announced that the company has registered a substantial growth during 1999. This was reflected in the total Gross Premiums which increased by 40 per cent to Lm13.5m (US$32.7m) in 1999.

Funds invested at 31 December 1999 amounted to Lm51m (US$123.7m), an increase of 60 per cent from Lm32m (US$77.6m) last year.

Profits before taxation increased to Lm1.99m (US$4.8m). The Net Asset Value as at 31 December 1999 was Lm2.72, an increase of 93cents (52 per cent) from last year.

Mr Zahra said: "As a result of the excellent investment results achieved by Middle Sea Valletta Life Assurance Co. Ltd the board of directors have passed a resolution to confirm an increased reversionary bonus of seven per cent as at 31 December 1999 of the policy account for the Comprehensive Life Policy (second series)."

On the "Old Series" endowment and whole of life policies an increased reversionary bonus of 4.65 per cent of the basic sum assured plus bonuses was confirmed as at 31 December 1999.

Also, on these policies, a Terminal Bonus payable on claims arising out of death or maturity during 2000 has been confirmed at the rate of one per cent of the Basic Sum assured plus attaching bonuses multiplied by the policy duration in years since 1 January 1992.

Mario C. Grech, deputy chairman and chief executive confirmed that Middle Sea Valletta Life Co. achieved excellent results on its investments. He also said that on the basis of the Actuarial Valuation and overall good operational performance the Board decided to increase the reversionary bonus on the 1st and 2nd series policies.

Mr Grech however 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 stressed that, more than ever, past performance is no guarantee for the future and therefore future bonus declarations could also go down. The company aims to achieve a fair and equitable distribution of such profits between the different generations and types of "with profit" policies.

Mr Grech mentioned that the board had agreed certain guidelines on the distribution of future surplus funds. Additional reserves will assist in the company's endeavours in the smoothing of future bonus declarations and the provision for terminal bonuses, even though the latter bonuses are not guaranteed.

Notwithstanding this, Mr Grech reiterated that "it is unlikely that the reversionary bonus rates will remain constant over the lifetime of the policy. Indeed investment returns can go down as well as up."

In 1998 Middle Sea Valletta was the first company to introduce the unit linked range of products in the Maltese market with the Investment Bond - a single premium policy. During 1999, the company continued to enhance this range by launching a versatile and flexible regular premium until linked product - The Maximum Investment Plan.

This new product not only offers life cover but also provides a choice of investments from a diversified selection of world class investment schemes including the Fidelity Funds SICAV and La Vallette Funds SICAV. These type of products, together with existing "with profit" traditional plans offer an ideal means of retirement planning.