Last Updated on Wednesday, 14 April, 2021 at 10:00 am by Andre Camilleri
MAPFRE MSV Life p.l.c. registered a profit before tax of €15.0 million for the year ended 31 December 2020, up 2.8% on the previous year. Total shareholders’ funds amounted to €161.3 million at the close of 2020, reflecting an increase of 9.5% during the year.
Commenting on these results, the newly appointed Chief Executive Officer of MAPFRE MSV Life p.l.c., Etienne Sciberras, stated that “undoubtedly, 2020 has been very challenging for the life insurance market in Malta due to the prolongation of the low interest rate scenario and the outbreak of the pandemic early in the year. Demand for With Profits single premium contracts softened on account of a drop in investment returns. This was contrasted by activity in new regular premium and retirement savings products, driven by improved fiscal incentives within an underlying increase in investor awareness of the importance of saving to support retirement. We consequently intensified the promotion of our Voluntary Occupational Pension Scheme and protection products”. Mr Sciberras also highlighted the success of efforts to sustain business continuity in 2020 through the reconfiguration of workflows and introduction of efficient remote working capabilities to ensure that the Company remained in a position to service customers at all times.
These developments were reflected in a 4.7% drop in gross premiums written for financial year 2020, which totalled €269.6 million. At the same time, net claims incurred increased by 24.3% to €261.2 million through the year, largely as a result of a continuing trend of maturing medium-term single premium contracts, a large proportion of which were subsequently re-invested into new medium-term contracts.
The MAPFRE MSV Life p.l.c.’s total assets increased by 2.7% to €2,563.6 million at the end of 2020, whilst net technical provisions (including investment contracts without DPF) increased by 2.1% to €2,349.3 million. The value of in-force business, which projects future transfers to shareholders arising from policies in force at the end of the year, increased by 5.0% to €77.2 million in 2020. This is attributable to the impact of new business inflows, improved technical margins and improved expectation of mortality performance.
The MAPFRE MSV With-Profits Fund stood at €2.18 billion at 31 December 2020, up from €2.15 billion in 2019, with growth driven both by operational cash-flows arising from new business as well as market returns on the differing asset classes held within the portfolios.
Reviewing developments for 2020, the Non-Executive Chairman of the Board of Directors of MAPFRE MSV Life, Dr Gordon Cordina observed that “the shareholders of MAPFRE MSV Life are wholly committed to ensuring that the Company remains adequately capitalised at all times and well positioned for both business growth and effective regulatory capital thresholds in place under the Solvency II framework.”
The solvency ratio stood at 188.7% at the end of 2020. The Directors have reviewed the Company’s capital needs over the forthcoming medium term within the framework of Solvency II and passed resolutions to increase the authorised share capital of the Company from €60 million to €120 million and the issued share capital from €54.75 million to €94.75 million. The capital increase was effected on the 25 March 2021.
Furthermore, in line with EIOPA recommendation of prudence in terms of dividend distributions, the Directors did not recommend the payment of a final net dividend for financial year 2020. For financial year 2019 the Directors had recommended the payment of a final net dividend of €11.77 million that was to be paid in April 2020. However, this payment was subsequently rescinded as part of the immediate reaction to the COVID-19 outbreak and retained within Company reserves.
Looking ahead, Mr. Sciberras indicated that, “Going forward we will reinforce our strong customer focus through continuous improvements in business processes and operations underpinned by digital investment and innovation. This will build upon the new distribution portal for Protection Business rolled out in 2020 as part of the project that is seeing us implement a new Life Administration System. This new digital portal is already enabling us to achieve a high percentage of straight through policy issuing at the point of sale.” From the perspective of the market, he opined that “The outlook is one of cautious optimism despite the deterioration in economic conditions due to the COVID-19 pandemic. While general economic recovery will likely need to extend beyond 2021, demand for protection, savings and investment products in Malta is expected to remain strong.”
Mr. Sciberras concluded, “2020 has shown the resilience of our business model, the strength of our balance sheet in times of unprecedented social, economic and market upheavals and our shareholders’ commitment to ensure that the Company remains adequately capitalised and well positioned for business growth. However, these results could only be achieved through the dedication and professionalism of our staff and the loyalty of our customers who continue to choose MAPFRE MSV Life, reflecting trust in our brand and in the quality of our service proposition.”
The Board expresses its gratitude and appreciation to the management and staff for their commitment and contribution to another satisfactory year, to intermediaries for their continued support and to the many loyal customers for placing their trust in MAPFRE MSV Life p.l.c.
The Board also expresses its gratitude and appreciation to David G. Curmi, outgoing Chief Executive Officer of MAPFRE MSV Life p.l.c. for his many years of service and leadership. David G. Curmi left the Company end January 2021 at the expiry of his contract. Furthermore, the Board also thanked Mr John Cassar White for his guidance and contribution over the past years as Chairman of the Board. At the Annual General Meeting held on the 23rd March 2021, Dr Gordon Cordina was appointed Chairman of MAPFRE MSV Life p.l.c.