KUALA LUMPUR: LPI Capital Bhd
expects to expand its market through new opportunities amid the resumption of full economic activities in 2023 and growth in domestic demand.
The insurer said this while acknowledging the new challenges to arise out of the expected implementation of wider phased liberalisation measures in the industry.
"In response, the group will continue to identify and expand its distribution channels to reach out to a wider segment of its targeted market, and establish new streams of intermediaries to strengthen its presence.
"While high inflation rates will continue to elevate claim costs and keener competition will further compress underwriting margin, the LPI Group will endeavour to further improve its market position and enhance its underwriting and claims management to ensure a better insurance service result," it said in a statement.
In the first quarter of its financial year, LPI posted a net profit of RM73.83mil, which compares to RM64.9mil in the same quarter in 2022.
The group's earnings per share rose to 18.53 sen from 16.29 sen in the comparative quarter.
Revenue in the quarter was RM463.3mil, up from RM416.09mil in 1QFY22.
According to LPI, the improved result was mainly owing to better performance in its investment portfolio, which recorded a 72.9% jump in investment return to RM42.7mil following the recovery in the bond market.
The group's insurance arm, Lonpac Insurance Bhd, posted a 22.3% year-on-year (y-o-y) surge in pre-tax profit to RM81.8mil with significant contribution for higher investment returns.
However, the group reported a deterioration in its claims performance with net claims incurred ratio increasing to 51.8% from 44.7% in 1Q22.
"With management expenses ratio at 20.1% and net commission ratio at 7.6%, Lonpac registered a higher Combined Ratio at 81.2% as compared to 77.0% achieved in FY2022.
"As a result, its insurance service Result came in 8.4% lower at RM61.0 million from RM66.6mil recorded in Q1 2022," said LPI.
The group's fire and miscellaneous classes of insurance reported lower insurance service result due to higher claims frequency and quantum registered.
In 1Q23, Lonpac’s gross written premiums expanded by 2.7% from RM476.7mil to RM489.4mil, due mainly to increases in both the fire and motor classes of insurance.
