General insurance lifts LPI Capital


LPI Capital Bhd reported a 2.7% increase in net profit to RM72.5 million in the first quarter ended Dec 31, 2018 (1Q18), from the RM70.6 million recorded in the previous year’s corresponding period, as a result of the higher income registered by its general insurance arm.

The company’s wholly owned subsidiary Lonpac Insurance Bhd saw its net earned premium income for the quarter surging by 20.8% to RM216.4 million against RM179.1 million, following its efforts to diversify its distribution channel, particularly by the agency network.

LPI Capital chairman Tan Sri Dr Teh Hong Piow (picture) said projections of a solid economy are expected to boost the performance of the group in the subsequent quarters.

“If the healthy economic conditions can translate into stronger demand for insurance services, the insurance industry in general may see a better year for 2018,” Teh said in a statement.

Lonpac’s higher income also pushed LPI Capital’s earnings per share in 1Q18 to 21.82 sen, compared to 21.25 sen in 1Q17.

Revenue for the period grew 9.6% to RM381 million versus RM347.6 million in the corresponding quarter.

In a filing to Bursa Malaysia yesterday, the insurance provider also reported a 1.9% rise in underwriting profit for the quarter, up to RM59.6 million from RM58.5 million recorded in the previous year.

The increase was boosted by the strong growth in its net earned premium.

On the other hand, LPI Capital’s investment holding segment recorded lower profit before tax of RM14.3 million compared to RM14.7 million due to higher management expenses during the current quarter.

Meanwhile, the group’s other comprehensive income for the three-month period surged to RM139.1 million from RM10.6 million due to higher realised gain on its investment in listed equities, which was reclassified from available-for-sale assets to fair value through other comprehensive income upon the adoption of Malaysian Financial Reporting Standards 9.

As at March 31, 2018, the group’s total assets stood at RM4.1 billion from RM3.8 billion last year. The increase was mainly attributed to the growth in equities investment and higher insurance receivables. The general insurance segment represented 70.9% of the group’s total assets to date.

Total liabilities of the group grew 10.5% to RM2.1 billion from RM1.9 billion backed by a RM126.4 million increase in insurance contract liabilities and RM93 million in insurance payables of its general insurance segment.

Total equity stood at RM2 billion against RM1.9 billion in the corresponding period a year ago on payment of dividends amounting to RM149.4 million during the current quarter. The increase was attributed to stronger market value of its equity investment.

In turn, the group’s fair value reserve rose by 18.5% to RM900.7 million from RM760.4 million, while its net tangible asset per share increased to RM5.98 compared to RM5.79 in 2017.