PETALING JAYA: LPI Capital Bhd’s (LPI) net profit for the third quarter ended Sept 30, 2019 fell 4.3% to RM87.82 million from RM91.81 million a year ago, due to an increase in claims and a slower growth in gross premium income.
Founder and group chairman Tan Sri Dr Teh Hong Piow (pix) said the group reported a 8.5% improvement in revenue to RM423.84 million from RM390.59 million previously, contributed by the increase in gross earned premium and investment income.
Its wholly-owned insurance subsidiary Lonpac Insurance Bhd reported a 0.5% growth in its gross premium income from RM378.1 million to RM380.0 million while its claims incurred ratio increased to 43.6% from 37.2% in the previous corresponding quarter.
For Lonpac, its combined ratio for the third quarter deteriorated to 70.8% from 65.1% previously while its underwriting profit declined 7.9% to RM75.7 million from RM82.2 million. This was mainly due to the unfavourable claims experience reported in medical and miscellaneous accident classes of insurance.
For the nine-month period, LPI’s net profit expanded 2.5% to RM235.76 million from RM230.05 million, while revenue rose 7% to RM1.2 billion from RM1.12 billion in the previous year’s corresponding period.
During the same period, Lonpac’s gross premium income increased 3.6% to RM1.21 billion from RM1.17 billion previously while its net earned premium income went up 10.2% to RM746.0 million from RM676.7 million.
However, its claims incurred ratio deteriorated to 45.2% from 41.6% previously while its combined ratio increased to 72.0% from 68.7%. With the higher claims reported, Lonpac’s underwriting profit was 1.9% lower at RM208.3 million from RM212.4 million.
Looking ahead, LPI said the volatile global economic conditions and the ongoing trade disputes continue to affect the performance of the Malaysian insurance industry.
The group expects the remaining period of 2019 to remain challenging as economic conditions are not expected to improve soon.
“We have taken steps to consolidate our market position and are reviewing portfolios where performances have not been up to expectation. In this competitive and volatile environment, we will focus on building a sustainable portfolio that will add value to our shareholders.”
At the noon break, LPI’s share price gained 10 sen or 0.6% to RM15.60 with 1,400 shares changing hands.
Source: The Sun Daily