By NUR HAZIQAH A MALEK / Pic By HUSSEIN SHAHARUDDIN

LPI Capital Bhd’s net profit saw a 0.39% drop year-on-year (YoY) to RM91.81 million for the third quarter (3Q) of financial year ended Sept 30, 2018.

In an exchange filing to Bursa Malaysia yesterday, the company noted that its net profit decreased on the back of lower revenue due to the decline in gross earned premium from its general insurance segment.

LPI founder and chairman Tan Sri Dr Teh Hong Piow (picture) said the year grew to be a challenging one for the country’s general insurance industry as the global economic condition remains volatile.

“On the domestic front, the property market has not recovered from its oversupply and weak demand position while major infrastructure projects have been under review, thus affecting the demand for general insurance,” he said.

He added that subsequently, the industry reported a mere 0.7% growth in gross premium reported for the first six months of the year.

Meanwhile, he said LPI’s subsidiary Lonpac Insurance Bhd was also affected by the slower growth from the insurance industry as it registered a lower gross premium income.

“The subsidiary posted a gross premium income of RM378.1 million versus the previous RM416.6 million.

“As an active player in the infrastructure projects’ insurance, it was also affected by the slowdown in the implementation of such projects,” he said.

He added that the performance of LPI is contributed primarily by Lonpac via its solid underwriting performance.

Currently, Bank Negara Malaysia is reviewing the outcomes of the second phase of the Phased Liberalisation of Motor and Fire Tariffs which began in 2016.

Teh said the liberalisation process for the industry has put a pressure on pricing, especially on the profitable fire portfolio of business.

“As a major player in the fire insurance, Lonpac has responded to the competition with new innovative products priced competitively and will further strengthen our market leadership in this portfolio,” he said.

The group’s revenue for the quarter registered a 3.98% drop to RM390.6 million.

The company’s share price closed 1.18% lower yesterday at RM16.80.