Founder and group chairman Tan Sri Teh Hong Piow, said the higher growth in revenue was mainly contributed by Lonpac.
KUALA LUMPUR: LPI Capital Bhd
(LPI) reported higher earnings and revenue in the fiurst quarter ended March 31, 2018 as its unit Lonpac Insurance Bhd (Lonpac), continued to expand its premium base.
It reported on Thursday the earnings increased by 2.7% to RM72.5mil from RM70.56mil while revenue rose at a faster pace of 9.6% to RM381m from RM347.64mil. Earning per share were 21.84 sen compared with 21.25 sen.
Its founder and group chairman Tan Sri Teh Hong Piow, said the higher growth in revenue was mainly contributed by Lonpac which saw its gross premium income for the quarter under review expanding by 16.2% to RM483.2mil from RM415.7mil.
Lonpac’s net earned premium income in Q1, FY18 surged by 20.8% from RM179.1mil a year ago to RM216.4mil.
“This was the result of organic growth from our diversified distribution channels, particularly our agency network,” he said.
For Lonpac, the claims incurred ratio increased to 47.1% in Q1 FY18 from 39.8% a year ago, as a result of higher claims reported.
However, he 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 RM59.6mil compared with RM58.5mil in the previous corresponding quarter.
“Lonpac’s profit before tax for the quarter under review registered an increase of 4.5% to RM76.4mil from RM73.10mil previously,” Teh said.
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