LPI Capital net profit up 44% to RM78.6mil in 4Q

KUALA LUMPUR: LPI Capital Bhd said since the implementation of the phased liberalisation of Malaysia’s general insurance industry, there has been greater price competition which is likely to exert pressure on underwriting margins.

“Extreme weather events such as floods have also pushed up the cost of reinsurance and affected insurers’ profitability. Lonpac Insurance Bhd will continue to adhere to appropriate pricing policies for certain flood-related products and prudent underwriting practices to mitigate the risk.

“The LPI Group will also continue to focus on strengthening and expanding its distribution channels, especially agency and bancassurance, to build larger market shares in our portfolio,” LPI said in a statement.

In the fourth quarter ended Dec 31 (4Q23), the insurer posted a higher net profit of RM78.58mil compared with RM54.61mil achieved a year ago.

The group’s net return on equity was reported at 3.4% and earnings per share at 19.72 sen for 4Q23, against 2.5% and 13.71 sen, respectively, in the corresponding quarter in FY22.

Revenue for the period rose to RM481.3mil against RM380.5mil previously.

For the full year, LPI posted a higher net profit and revenue of RM313.7mil and RM1.9bil respectively.

LPI said the increase in revenue was mainly contributed by higher insurance revenue, as well as higher interest and dividend income. Insurance revenue accounted for 93.5% of total operating revenue in FY23.

For FY23, Lonpac’s gross premium income increased 6.2% to RM1.7bil from RM1.63bil in FY22, with all major insurance classes posting commendable growth.

With the improved performance reported by the group in FY23 as compared to FY22, the board of directors has declared a second interim dividend of 40.0 sen per share.

“This second interim dividend payment, which amounts to RM159.4mil in total, is part of the group’s continuing efforts to reward shareholders for their ongoing support,” LPI said.

Together with the first interim dividend of 26.0 sen amounting to RM103.5mil which was paid in September 2023, the total dividend payment for FY23 is RM262.9mil, representing 83.8% of the group’s net profit attributable to shareholders.

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