Lonpac one of local reinsurers for MAS

KUALA LUMPUR: LPI Capital Bhd's wholly-owned subsidiary, Lonpac Insurance Bhd, is one of the local reinsurers of the missing flight MH370, including three passengers on board.
LPI CEO Tan Kok Guan estimated the general insurer's exposure at "a few hundred thousand".
"Lonpac does participate in the Malaysian aviation pool in which we reinsure part of the Malaysia Airlines (MAS) aviation programme but our participation is very small," he said at the group's AGM here yesterday.
He added that Lonpac has personal accident insurance cover on three passengers on board the ill-fated flight.
"At the moment, we can only estimate our exposure because the information is compiled from newspapers. Our total exposure is only a few hundred thousand, which is not big," said Tan.
SunBiz reported last week that Etiqa Insurance & Takaful is the lead local insurer for MAS in Malaysia, while Malaysian Reinsurance Bhd is one of a number of local reinsurers for the airline.
LPI Capital is controlled by Public Bank Bhd chairman Tan Sri Dr Teh Hong Piow.
For the financial year ended Dec 31, 2013, LPI saw its net profit rise 20.7% to RM201.44 million while revenue grew 7.7% to RM1.12 billion.
The group will continue to focus on organic growth of its core underwriting policy in order to sustain a healthy underwriting margin. It also expects the insurance industry to become increasingly competitive with the detariffing of motor and fire insurance in January 2016.
"While Lonpac may be affected by the expected reduction in fire premium rates, our focus is to continuously build our fire insurance portfolio at the fastest speed in the liberalised environment and continue with leadership growth in this segment," Tan said.
The entry of foreign reinsurers and insurers in the local market is expected to increase pressure on Lonpac's capital position by driving premiums down. Further consolidation in the sector is also expected to further drive up competition.
The group expects the liberalisation to be implemented in stages and has been actively building its market share to achieve economies of scale, reduce unit costs and increase its competitive edge.
Tan sees growth potential in the non-residential property segment despite the recent property cooling measures announced recently.
"We expect the housing sector to slow down in the short term but to recover in the near future. In line with the Economic Transformation Programme by the government, we're increasing our marketing efforts to further strengthen our market share in the non-residential property segment, which has much growth potential," he said.
Meanwhile, Lonpac's trade credit insurance business, which it launched in 2012, is expected to contribute 1% of its total business in 2015. In its first two years of business, it recorded RM1 million in gross premiums.
"Our strategic partner, Atradius Credit Insurance NV, provides trade credit insurance bonding and collection services with presence in 42 counties. With their technical expertise and worldwide experience, they will be able to contribute significantly to our growth in domestic and export trade credit insurance," said Tan.
He also expressed optimism on the insurance group's businesses in Singapore and Cambodia.