KUCHING: LPI Capital Bhd (LPI Capital) recorded a pre tax profit of RM208.7 million for the nine months’ period ended September 30, 2014, an increase of 12.5 per cent over the previous corresponding period.
Teh says the profit before tax of the group for the third quarter of 2014 registered a 7.6 per cent increase to RM77.4 million.
Revenue of the group for the period under review increased by 5.6 per cent from RM824.4 million to RM870.5 million.
The strong performance of the group is contributed by the continued good results reported by its wholly-owned insurance subsidiary, Lonpac Insurance Bhd (Lonpac).
For the nine months’ period, Lonpac reported a 13.8 per cent jump in its pre-tax profit to RM181 million from RM159 million recorded in the previous corresponding period while its gross premium written for the nine months’ period registered an increase of 3.6 per cent to RM893.7 million from RM862.4 million.
Commenting on the group’s performance Tan Sri Teh Hong Piow, founder and chairman said, “The insurance industry is facing intense competition as the major players are actively building their market shares and establishing market position ahead of the liberalisation of the insurance market in Malaysia.
“While motor insurance is the main target for market share expansion, we also see keen competition in other non-motor insurance classes.
“The group believes that while we continue to expand our market share in our targeted portfolios, we will exercise discipline in risk selection and prudency in claims management.”
For the nine months’ period under review, Lonpac has further reduced its claims incurred ratio from 46.5 per cent to 44.8 per cent while its combined ratio has improved to 69.5 per cent from 71.4 per cent recorded in the previous corresponding period.
Teh said, “The profit before tax of the group for the third quarter of 2014 registered a 7.6 per cent increase to RM77.4 million from RM71.9 million recorded in the previous corresponding quarter on the back of the increase in revenue by 6.2 per cent to RM301.2 million.
“Earnings per share for the third quarter improved to 29.14 sen as compared to 27.40 sen reported in the previous corresponding quarter.
“The balance sheet of the Group remains strong and healthy with its shareholders’ fund increased to RM1,610.4 million from RM1,457.7 million while its total assets stands at RM3,379.3 million, an increase of 8.7 per cent from previous corresponding period.
“Likewise, the investment portfolio remains stable with improved investment income for the 9 months’ period. Net return on equity rose to 10.3 per cent.”
However, he cautioned that while the economy of US has shown strong signs of recovery and Malaysia’s latest GDP growth rate has been impressive, the weak Eurozone economies and the geopolitical tensions in the Middle East may affect the global economic climate.
The group will continue to focus its business plan on growth expansion in the targeted portfolios and ensure that the underwriting performance of Lonpac be further enhanced.