In the prior year there was a significant one-off deferred tax gain whereby all unutilised tax amounts available for relief against future taxable income in terms of the applicable law were recognised.
In 2013 the Group recorded an after-tax profit of €9.85 million for the year.
Gross premiums written (including investment contracts without DPF) for financial year 2013 increased by 27.5% from €87.31 million to €111.32 million. This was due to increases across various classes of protection business and stronger single premium business.
The MSV Group’s total assets increased by 8.4% from €1,265.50 million at the end of 2012 to €1,372.10 million at the end of 2013, whilst the net technical provisions (including investment contracts without DPF) increased by 9.1% from €1,117.02 million in 2012 to €1,218.98 million in 2013.
The value of in-force business, disclosed as an intangible asset, increased by 7.6% from €45.72 million in 2012 to €49.21 million in 2013. The value of in-force business reflects the value of the projected future transfers to shareholders arising from policies in force at the end of the year.
The resilience and upturn in equity and bond markets kept returns similar to prior year with net investment income increasing from €95.44 million in 2012 to €98.19 million in 2013. The strong investment performance was underpinned by the Company’s conservative and diversified portfolio of assets, as well as by the rigorous and prudent investment management process that is so important in the management of life insurance companies.
Total shareholders’ funds at the close of 2013 amounted to €135.13 million (2012: €129.82 million), an increase of 4.1% over the previous year.
The net asset value per share has increased from €5.93 as at the end of 2012 to €6.17 per share driven by the underlying profitability of the business.
The Chairman of MSV Group, John Cassar White, stated “I am pleased to be able to announce another strong set of results registered by MSV Group for 2013. 2013 was the year when most of the global economies started showing real signs of momentum. The combination of better growth prospects in Europe and the US together with the fading global financial risks contributed to the upturn in the global equity markets, with developed markets leading the race. Investors finally became confident in the long awaited economic recovery and enthusiasm for the riskier assets flourished. Nonetheless, 2013 will be remembered as a difficult year for the bond market. Market sentiment in 2013 was significantly diversified across regions as the use of monetary policies by global central banks continued to be the key driver of investment markets driving much of the market volatility.”
Mr. Cassar White added, “MSV Life’s diversified investment portfolio, the robust investment management process, the quality assets that we hold in the portfolio as well as our tactical positions contributed favourably to our results in 2013. MSV has a strong track record of investment management and we will continue to manage our balance sheet prudently, ensuring that MSV Life remains adequately capitalised at all times and well positioned for both business growth and the forthcoming Solvency II regime. MSV Life remains focused on the generation of capital and its disciplined allocation.”
Mr. Cassar White concluded, “going forward we will maintain our strong focus on our customers by continuously assessing our business processes and operations in order to provide good value and excellent service. To this end we will continue to invest and innovate in information technology. During 2013 we embarked on a major IT programme which will involve the migration of our business to the latest technology. This will enable us to offer superior levels of service to our customer base. In tandem we have a number of initiatives lined up to strengthen further our digital platform and widen our digital marketing strategy.”
In March 2014, 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 2013. These amounted to 3.15% for the MSV Comprehensive Life Plan (regular and single premium policies), 3.35% in respect of the MSV Comprehensive Flexi Plan (regular and single premium policies), 3.35% under the MSV Single Premium Plan and 3.35% 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 2.20% of the basic sum assured plus bonuses was declared. In addition the Board also approved the declaration of a Final Bonus in respect of the Comprehensive Life Plan (single and regular premium) and the Comprehensive Flexi Plan (single and regular premium) policies 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 13 March 2014 being the date of the 2013 bonus declaration and the next bonus declaration, at a rate of 1.00% for every full year 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 3.35% 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 2.00% 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, “in 2013 the life insurance market in Malta experienced a pick-up in demand for Single Premium and Unit Linked business with appetite recovering from the decline encountered in 2012. Our policy contracts in issue maintained their growth momentum and we closed off the year just short of issuing our one hundred thousandth active policy.”
Mr. Curmi added, “we continue to see a strong demand 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. The Maltese life insurance market remains an underinsured market. Although life insurance companies are playing an increasingly important role in Maltese household savings, comparative studies with other European life insurance markets show that whilst the Maltese life insurance market has grown significantly between 1994 and 2011, the per capita spend on life insurance is positioned at almost half of the average European spend. We therefore see significant life protection and long term savings uplift potential in the local life insurance market. We look forward with enthusiasm to the opportunity for us to play an important role in the expected national pension reform particularly in the creation and provision of second and third pillar retirement solutions once the required legislative framework is put in place.”
Mr. Curmi concluded, “whilst we have an important role to provide our customers with prosperity and peace of mind we acknowledge that we have a wider commitment to society by also supporting those who are not our customers. Over the years we have developed a Corporate Social Responsibility (CSR) policy framework which encompasses shareholders, the environment, people, communities and customers. Through our CSR programme we provide financial assistance to various sectors ranging from art, culture, heritage, sport, education and charity.