LPI Capital records higher Q1 profit of RM77m

LPI Group founder and chairman Tan Sri Teh Hong Piow. — Reuters pic
LPI Group founder and chairman Tan Sri Teh Hong Piow. — Reuters pic

KUALA LUMPUR, April 15 — LPI Capital Bhd recorded a profit of RM77.15 million in the first quarter (Q1) of its financial year ended March 31, 2019, compared with RM72.5 million in the same quarter last year, backed by stronger growth in its insurance subsidiary, Lonpac Insurance Bhd.

Revenue for the period under review increased 3.1 per cent to RM392.7 million from RM381.0 million in the previous corresponding quarter.

LPI Group founder and chairman Tan Sri Teh Hong Piow said despite the operating environment remaining challenging, the group managed to improve its performance in Q1 2019.

“Lonpac has reported a marginal improvement in its performance in Q1 backed by premium income which registered a stronger growth of 8.9 per cent to RM235.6 million from RM216.4 million in the previous quarter,” he said in a filing with Bursa Malaysia today.

Teh said the higher net earned premium was the result of a lower reinsurance ratio of 39 per cent for the quarter compared with 42.5 per cent reported previously.

He said Longpac’s claims incurred ratio increased slightly to RM47.4 per cent from 47.1 per cent, management expense ratio at 22 per cent and commission ratio at 5.2 per cent, resulting in combined ratio of 74.6 per cent, slightly higher from 72.4 per cent reported in the previous corresponding quarter.

“With a higher combined ratio, but an improved net earned premium written, Lonpac was able to register an underwriting profit of RM59.6 million,” he added.

Teh said the continued uncertainties in the global economy, and stiff competition in the local insurance market in the light of a liberalising market, would remain the main challenges for the group.

“However, the government’s plan to proceed with the implementation of some infrastructure projects that were suspended earlier, would spur demand for insurance coverage, especially in project insurance where Lonpac is an active player.

“We will continue to innovate new products to meet the insurance needs of the customers and further strengthen our market position,” he added. — Bernama

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