KUALA LUMPUR: Insurer LPI Capital Bhd kicked off the third quarter results season on Thursday with earnings at RM75.84mil on better claims experience, lower commission expenses.
LPI said on Thursday the earnings were up 18.1% from the RM64.19mil a year ago. Profit before tax surged 22.6% to RM94.87mil from RM77.42mil.
Revenue rose 16% to RM349.51mil from RM301.23mil a year ago. Earnings were 22.85 sen compared with 19.39 sen.
LPI’s insurance unit Lonpac Insurance Bhd (Lonpac), delivered a strong performance for the third quarter of 2015, with gross premium income and underwriting profit having grown by 7.8% and 26.5% to RM310mil and RM67.8mil respectively (from RM287.7mil and RM53.6mil respectively a year ago).
“The much improved underwriting performance resulted from better claims experience and lower commission expenses, as reflected in the reduction of its claims and commission ratios to 38.4% and 6.5% from 43.4% and 7.0% respectively,” it said.
For the nine months, its earnings rose 31.8% to RM218.77mil from RM165.96mil in the previous corresponding period. Pre-tax profit rose 28.2% to RM267.45mil from RM208.65mi in the corresponding period in 2014. Revenue grew 8.7% to RM945.96mil from RM870.52mil.
LPI founder and chairman Tan Sri Teh Hong Piow said: “Malaysia, as an emerging and commodity producing economy, has been affected by weaker commodity prices, the strength of the U.S. dollar and the uncertainty in the global financial markets.
“As a result, domestic demand has been dampened and this has affected the Malaysian insurance industry, as reflected in the moderation of growth of general insurance premium to 2.3% for the first half year of 2015 from 6.4% registered in the first half of 2014,” he said.
Teh said despite operating in a volatile environment, I am pleased to announce that LPI Group has chalked up an impressive performance for the first nine months of 2015.
“The good performance of the Group is contributed by the strong results of Lonpac which reported a commendable 9.3% growth in pre-tax profit to RM197.8mil for the nine months period under review.
“This was on the back of a 10.3% increase in gross premium income for the first nine months of 2015 to RM985.6mil from RM893.7mil in the previous corresponding period,” he said.
Lonpac’s underwriting showed favourable results, with underwriting profits increasing by more than RM14.5mil to RM160.3mil. It had further reduced its claim ratio from 44.8% to 43.3% and commission ratio from 5.6% to 4.1%.
“As a result, its combined ratio shed 1.0% from 69.5 % to 68.5 % for the nine months’ period and is much lower than the industry average of approximately 88.0%,” he said.
