Tan Sri Teh Hong Piow said the group was confident that its strong fundamentals will enable it to stay resilient and flexible.
KUALA LUMPUR: Insurer LPI Capital Bhd
kicked off the first quarter results season on Monday with higher net profit of RM77.16mil in the period ended March 31, 2019 despite a challenging environment.
It announced the net profit was an increase of 6.4% from the RM72.50mil a year ago. Earnings per share were 19.37 sen compared with 18.20 sen.
Its revenue rose by 3.1% to RM392.70mil from RM380.99mil a year ago.
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 Q1FY19.
“Lonpac Insurance Bhd (Lonpac), the wholly-owned insurance subsidiary of LPI, reported a marginal improvement in its performance for Q1FY19,” he said.
Lonpac's profit before tax increased by 3.5% to RM79.1mil from RM76.4mil but its gross written premium was 4.6% lower at RM460.9mil versus RM483.2 mil written previously.
Teh said this was due partly to the absence of government infrastructure projects and compressed premium pricing.
Lonpac’s net earned premium income rose by 8.9% to RM235.6mil from RM216.4mil due to a lower reinsurance ratio of 39.0% for the quarter as compared to 42.5% reported previously.
Claims incurred ratio of Lonpac increased slightly to 47.4% from 47.1% and with management expense ratio at 22.0% and commission ratio at higher 5.2%, the combined ratio was recorded at 74.6%, an increase from 72.4% 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 RM59.6mil,” he said.
Teh said that continued uncertainties in the global economy coupled with stiff competition in the local insurance market in the light of a liberalising market will 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 will spur the demand for insurance coverage especially in project insurances 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. With the concerted efforts of the staff and support from our partners, we are confident that the group will be able to continue reporting improved performance and create value for shareholders,” Teh said.
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