8621 LPI Capital 1Q net profit rises 34% to RM42m

by **Cals** Tue 09 Apr 2013, 11:37

LPI Capital 1Q net profit rises 34% to RM42m
Business & Markets 2013
Written by Surin Murugiah of theedgemalaysia.com
Tuesday, 09 April 2013 09:58

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KUALA LUMPUR: LPI CAPITAL BHD []’s net profit for the first quarter (1Q) ended March 31 rose 33.76% to RM42.11 million from RM31.48 million a year ago.

In a filing with Bursa Malaysia yesterday, LPI Capital said the higher profit was due to a 5% rise in revenue to RM258.46 million, mainly on higher gross premiums.

Earnings per share rose to 19.11 sen from 14.29 sen, while net assets per share was at RM5.92.

LPI Capital founder and chairman Tan Sri Teh Hong Piow said the better performance was due to the company’s robust risk management in underwriting, business development and claims management.

“This enabled the group to register underwriting surplus for all classes of risks underwritten. The underwriting profit improved significantly by 72% to RM25.5 million from RM14.8 million in the first quarter of 2012,” Teh said in a statement.

LPI’s traditional distribution channels — agency and bancassurance — contributed about 70% to its total gross premium income of RM315.5 million for the quarter. Global partnership and broking, the other two distribution channels, also showed positive growth during the period.

On its outlook, the company said despite the challenging market conditions and an increasingly competitive business environment resulting from the ongoing consolidation of the insurance industry, its strategy is to continue focusing on organic growth to increase market share and maintain an overall favourable operating performance.

“We will focus our growth primarily on our traditional distribution channels of agency and bancassurance, as well as global partnership and broking business.

“The group is confident it will maintain its earnings momentum and continue to report good results for the next quarter of the year,” said LPI.
According to Teh, with the ongoing consolidation in the insurance sector, competition remains keen as major players are building their market share in anticipation of the liberalisation of the industry.

This article first appeared in The Edge Financial Daily, on April 9, 2013.