Since acquiring the majority of the group in 2016, chairman Paolo Catalfamo has led a transformation that has made its companies profitable and trusted partners for clients and investors alike. As the LifeStar Group focuses on its respected life and health insurance products – LifeStar is now ready to go to the next level with an Initial Public Offering (IPO) of the insurance company and is offering investors the opportunity to become a part of its success. We caught up with Prof. Catalfamo to gain an insight into the latest developments.
How has the company performed over the past five years?
We embarked on a strategic restructuring plan five years ago which involved reforming the company’s structure, introducing high levels of corporate governance, ensuring we have a highly competent team heading our key departments and focusing on the life and health insurance sectors.
Once that process was completed we rebranded the company and the next natural step is to offer shares of our insurance company on the market, presenting investors with the chance to be part of our next chapter. We have also been the local representatives of Bupa – Malta was their first overseas venture – for five decades. Bupa was a pioneer in the medical health insurance sector in Malta and its reputation speaks for itself.
Why has the company issued the IPO and the bond?
Our life company has been a profitable year on year, has substantial and solid assets and is growing fast. We have seen over 100 per cent growth in volumes in certain areas. We want to continue this growth both within the domestic market – where we have been making processes more user-friendly and efficient – and also internationally, where we have already prepared the groundwork to penetrate markets in northern Italy and Switzerland. Any company with such objectives needs capital and the IPO and the bond issues are the best combination to strengthen our capital base. Equity investors will have the benefit of being part of a highly capitalised company which will target both growth and dividends distribution.
We have managed to maintain good average profitability and now is the time to expand. Being quite a small company not burdened by bureaucracy and a complex cost structure, it is also relatively easy for us to expand while maintaining our existing cost structure. The solid foundations we have built present opportunities for significant growth.
What will investors gain by investing in LifeStar?
Investors have the opportunity to get in early into a company that already has over €8 million in retained earnings and expects to pay regular dividends. For those buying bonds, this is a good time to make a sound conservative investment with a fixed four per cent return. For those buying shares, they will get to share in the success of a company that will be much bigger in the next two to three years – giving them a great return on investment. LifeStar is also regulated by the MFSA, which gives investors additional peace of mind.
Why is the life insurance sector an attractive investment?
Firstly, the sector has shown itself to be very resilient: despite lockdown and COVID-19, revenue still grew by 15 per cent on the previous year.
Secondly, there is plenty of room for growth and being relatively small (compared with our larger banking competitors) makes our company more flexible, focused and agile to adapt to the market. We are also investing heavily in technology.
So this is a great opportunity to invest in a market that is growing and at the same time controlled.