PETALING JAYA: LPI Capital Bhd expects a more challenging outlook for the year and will adapt to face the circumstances ahead.
The insurer said it remained confident of its ability to adapt and innovate.
“The LPI Group will remain focused on business growth to offset the expected compression in margins arising from the implementation of phase 2A of the market liberalisation plan,” the company said in a statement.
“We will continue to drive our digital transformation to improve the customer experience and enhance operational efficiency.
“The LPI Group’s prudent underwriting approach and diversified business development channels will facilitate it to weather the numerous challenges in 2023,” it added.
According to the group, the country’s economy is expected to moderate in 2023 amid challenging external conditions and slowing domestic demand.
“As the insurance industry faces rising claims and reinsurance costs, global political and economic uncertainties and rapidly changing operating models, the ability to change and effectively adapt quickly remains as important as ever.
“We will also continue to drive our digital transformation to improve the customer experience and enhance operational efficiency.
LPI Capital’s fourth quarter ended Dec 31, 2022 net profit showed a 14.4% year-on-year (y-o-y) improvement to RM83.57mil on the back of quarterly revenues improving by 1% y-o-y to RM429mil.
“The improved profitability was mainly contributed by an increase in investment income and a lower provision for fair value losses on investment,” it said.
LPI said its net return on equity for the same period under review was higher at 3.8% from 3.4% while earnings per share came in at 20.97 sen compared with 18.34 sen recorded in the previous year’s corresponding quarter.LPI Capital had declared a second interim single-tier dividend of 35 sen that would be paid on March 2.
The group said the entitlement would be determined on the basis of the record of depositors as at Feb 22, 2023.
In FY22, LPI Capital said its performance was affected by significant changes in the operating environment as the domestic economy reopened after the Covid-19 lockdowns.
“While the resumption of business and social activities catalysed a return to growth, it also gave rise to insurance claims returning to pre-pandemic level following a significant decline over the past two years,” it said.
“As a result of the normalisation of claims, the group’s profitability had deteriorated on a year-on-year basis,” it added.