Business written contracted marginally, closing off financial year 2011 at €128.02 million compared to €147.49 million in 2010. This was due to a company strategy to write more regular premium and protection business, and to the prevailing market conditions.
The MSV Group’s total assets increased from €1,130.71 million at the end of 2010 to €1,165.11 million at the end of 2011, whilst the life fund increased by 3.41% from €1,000.44 million in 2010 to €1,034.55 million in 2011.
The value of in-force business decreased by 1.79% from €42.53 million in 2010 to €41.77 million in 2011. The value of in-force business reflects the after tax value of the projected future transfers to shareholders arising from policies in force at the end of the year.
At the end of 2011 the level of net admissible assets for statutory solvency purposes stood at €72.61 million (2010: €68.79 million), which represents an excess of €30.26 million (2010: €28.45 million) over the ‘required margin of solvency’ as stipulated in the Insurance Business Regulation of €42.35 million (2010: €40.35 million).
Total shareholders’ funds at the close of 2011 amounted to €111.65 million (2010: €108.89 million), an increase of 2.53% over the previous year.
The Chairman of MSV Group, Roderick Chalmers, stated “2011 was marked by historically low yields, exceptionally volatile equity markets and a dampened retail demand. This investment environment is not ideal for a long term long only investor like MSV Life. The equity exposure in our diversified portfolio was a negative drag on the overall performance of the portfolio during 2011.”
Mr. Chalmers added, “notwithstanding the unfavourable investment conditions during 2011, the MSV Life investment portfolio managed a marginal positive total return. The diversification across various asset classes and currencies, the robust investment management process, the quality assets that we hold in the portfolio as well as our tactical positions contributed favourably to our result as investment assets exceeded the €1 billion mark. We have a strong track record of investment management, and we will continue to manage our balance sheet prudently, focusing on capital generation and the management of our liquidity position.”
Mr. Chalmers concluded “MSV Life has total assets of over €1,165 million, a customer base of over 80,000 policyholders and shareholders’ equity of €112 million. It is Malta’s leading life insurance company and prospects for continuing growth and development are encouraging, both in the life assurance and in the long term savings and retirement areas.”
The Board of Directors of MSV Group approved a resolution whereby differential rates of Regular Bonuses were declared in respect of with-profits plans held with MSV Life for the year ending 31 December 2011. These amounted to 2.25% for the MSV Comprehensive Life Plan (regular and single premium policies), 2.45% in respect of the MSV Comprehensive Flexi Plan (regular and single premium policies), 2.45% under the MSV Single Premium Plan and 2.45% under the with-profits options of the MSV Investment Bond and of the MSV Retirement Plan. On the ‘Old Series’ Endowment and Whole Life policies, a Regular Bonus of 2.2% of the basic sum assured plus bonuses was declared.
The Board also approved a Regular Bonus of 2.45% on those Secure Growth policies which formed part of the portfolio of business transferred to MSV Life from Assicurazioni Generali S.p.A. during 2000. Finally the Board also approved a Regular Bonus of 1.75% on the Alico 78 policies and a Regular Bonus of 2.0% on the Alico 66 polices which formed part of the portfolio of business transferred to MSV Life in 2011 from American Life Insurance Company (“ALICO”).
The Chief Executive Officer of MSV Life, David G. Curmi, stated, “new sales of protection and savings policies held up well, both against prior year and target levels despite the subdued consumer confidence, and were well spread across all principal product groups. We continue to see good momentum in all our product groupings as customers continue to choose MSV Life, reflecting trust in our brand and in the quality of our service proposition.”
Mr. Curmi added, “through the combination of a strong brand, solid reputation, financial strength, product breadth and significant distribution reach, particularly through our successful bancassurance partnership with Bank of Valletta p.l.c., MSV Life is set to continue to grow its core business in the local market. We continue to attract demand for our products through our strong bancassurance and retail networks. These have been developed further with the opening in June 2011 of our flagship Customer Services Centre at Development House in Floriana. We look forward with enthusiasm towards further strengthening our new alliance with the Mapfre Group and its growing presence in the Maltese Islands.”