Middlesea Insurance plans new products, customer charter

Now that it has written off the losses incurred from the investment in Italian subsidiary Progress Assicurazioni SpA over the past 24 months, Middlesea Insurance plc has dusted itself down and is forging ahead with its 2010 mission to consolidate the already robust Maltese operation.

At the core of that mission is a commitment to transform Middlesea into a decidedly customer-centric business and plans to launch a customer charter with a service levels pledge within the next few months.

By encouraging customer feedback, the insurer aims to remodel existing products to better address clients' requirements and is currently examining the market potential of innovative insurance propositions.

"Middlesea has, over its history, always produced a respectable profit from its Maltese operation and its focus going forward is to enhance returns to shareholders through its increased focus on the local market," chief operations officer Anne Marie Tabone told The Times Business this week.

"The company boasts a strong technical team that provides all policy holders with the necessary cover. Malta's insurance market has traditionally produced certain types of cover. Middlesea is committed to provide not only the more conventional products, but is very open to feedback from policy holders and potential holders to create new products. This is the changing face of Middlesea."

As market leader by volume of premium - Middlesea currently enjoys the custom of around 25 per cent of the local market - the insurer has committed itself to be the forerunner in educating the community about the true purpose of insurance.

The financial services community has repeatedly noted that Malta is heavily under-insured, a state of affairs arguably stemming from misperception, lack of awareness of the availability of cover, and ignorance of risk.

"Many people do not seem to recognise that they are able to purchase cover for eventualities that could potentially put them in financial difficulty," Ms Tabone explained.

"This is the purpose of insurance. Middlesea is to further strengthen the education of the market and it is in a position to explain the benefits of insurance and the wide variety of cover options that are possible. The Maltese market is still not well developed in this regard and it is heavily under insured."

Ms Tabone, who is also the company's chief financial officer and reports directly to newly appointed non-executive chairman Joseph F.X. Zahra, pointed out that Maltese customers often seek insurance solely because it is mandatory, like motor or home classes.

Home contents insurance lags behind in take up, and Ms Tabone believes a considerable number of properties across the country remain uninsured. Many home owners also tended to cancel their home insurance policies as soon as mortgages are settled.

Other classes of business available to firms and professionals are not widespread among customers. A lack of awareness prevails where classes like employers' liability and personal accident policy for the self-employed is concerned.

Ms Tabone said Middlesea is ideally positioned to accommodate increased business under this new drive to win customers.

"Even after the Progress experience, Middlesea still holds considerable shareholder equity to underwrite the level of premiums and risks it has undertaken," Ms Tabone pointed out. "This is an important indicator of the peace of mind and security that Middlesea is able to offer customers. The strength of the balance sheet that the company has built over the years meant that it was able to withstand the significant test posed by Progress Assicurazioni. Middlesea also maintains a particularly prudent and conservative approach to its reserves."

She added Middlesea's business security is backed by a strong reinsurance panel of Europe's largest reinsurers including its own shareholders Munich Re and Mapfre Re.

For its own peace of mind, Middlesea's reinsurance department constantly reviews the security of the entire programme to ensure each member can lend its balance sheet support to Middlesea.

On the home market, the company will pursue its long-standing strategy to underwrite for profit and not solely for turnover. Ms Tabone emphasised the company had no intention of engaging in product price wars on any class of business.

Within its ranks, the Floriana-headquartered operation will continue to invest in its teams to ensure it is able to offer increasingly high levels of service. It has committed considerable funds to the training and further education of its technical, accounting and IT staff, Ms Tabone said, and is also to avail itself of opportunities for knowledge transfer offered by Munich Re and Mapfre Internacional overseas.