LPI Capital earnings up 2.7% in first quarter

PETALING JAYA: LPI Capital Bhd’s net profit rose 2.7% to RM72.5 million in the first quarter ended March 31, 2018, from RM70.6 million in the previous corresponding quarter on the back of higher profit from general insurance segment.
Revenue for the quarter grew 9.6% to RM381 million, compared with RM347.6 million in the same period a year ago mainly driven by growth in gross earned premium from its general insurance segment.
The group’s chairman Tan Sri Teh Hong Piow said the growth was mainly contributed by its wholly-owned insurance subsidiary, Lonpac Insurance Bhd, which saw its gross premium income for the quarter under review expanding by 16.2% to RM483.2 million from RM415.7 million previously.

Lonpac’s net earned premium income for the first quarter surged by 20.8% from RM179.1 million in the previous corresponding quarter to RM216.4 million.
“This was the result of organic growth from our diversified distribution channels, particularly our agency network,” Teh added.
The group’s earnings per share came in 0.59 sen higher at 21.84 sen while net return on equity reduced to 3.7% from 4.1% partly due to the bigger equity base.
For Lonpac, the claims incurred ratio increased to 47.1% for the first quarter from 39.8% in the previous corresponding quarter, as a result of higher claims reported.
The group said Lonpac managed to reduce its management expense ratio to 21.7% from 24.7% partly due to the strong growth of its net earned premium but its commission ratio creeped up to 3.6% from 2.8%.
This culminated in a higher combined ratio of 72.4% but an increase in underwriting profit of RM59.6 million compared with RM58.5 million in the previous corresponding quarter, it noted.
Commenting on its outlook, Teh said if the healthy economic conditions can translate into stronger demand for insurance services, the insurance industry in general may see a better year for 2018.
“For LPI, we hope to report an improved performance for the subsequent quarters,” he added.