Reviewing the performance of LPI Capital Bhd (LPI) for the 2nd Quarter of FY2022, Tan Sri Dato’ Sri Dr Teh Hong Piow, Chairman and Founder, commented on the performance of Lonpac Insurance Bhd (Lonpac), which had been impacted by a surge in claims and the poor results of its investment portfolio. For the 2nd Quarter of FY2022, Lonpac’s Net Claims Incurred Ratio increased to 46.8% from 35.8% reported in the previous corresponding Quarter.
For the 2nd Quarter of FY2022, Lonpac registered a Profit Before Tax of RM74.9 million, 32.6% lower than the RM111.2 million achieved in the previous corresponding Quarter. Despite the intense competition in the general insurance industry, Lonpac managed to maintain its market position with its Gross Premium Income coming in at RM372.0 million, representing a 0.7% increase from RM369.4 million reported previously.
Net Earned Premium Income for the Quarter under review increased by 2.5% to RM253.4 million from RM247.2 million.
For LPI, its Profit Before Tax for the 2nd Quarter of FY2022 was reported at RM73.5 million, 33.1% lower as compared to RM109.9 million registered in the previous corresponding Quarter. LPI’s Net Profit Attributable to Shareholders was 32.3% lower at RM56.8 million from RM83.9 million
Meanwhile, Net Return on Equity came in at 2.7% against 4.1% previously, translating to an Earnings Per Share of 14.25 sen, down from 21.07 sen achieved in the 2nd Quarter of FY2021.”
Tan Sri Teh further added, “Lonpac’s underwriting performance in FY2022 weakened as claims begin to normalise upwards, especially from the Motor and Miscellaneous Accident insurance segments. For the six months ended 30 June 2022, its Motor Claims Incurred Ratio surged to 82.6% from 61.0% registered in the previous corresponding period.
It’s performance for the 1st Half Year of FY2022 was affected by the lower profitability reported by Lonpac coupled with a reduction in its investment income. The investment income of the Group was RM17.7 million lower at RM40.8 million from RM58.5 million registered in the previous corresponding period, mainly due to lower dividend incomes from its equity and unit trust investments.
For the first six months ended 30 June 2022, LPI reported a Profit Before Tax of RM149.2 million, 28.3% lower as compared to RM208 million reported in the previous corresponding period. Its Net Profit Attributable to Shareholders was registered at RM118.3 million, 28.8% lower as compared to RM166.2 million. Net Return on Equity reported at 5.6% against 8.0% previously while Earnings Per Share came in lower at 29.69 sen against 41.73 sen.
