LPI Capital Bhd(LPI) Group reported improved performance for the 4th Quarter of FY2022. For the Quarter under review, LPI’s Profit Before Tax surged 23.5% to RM120.9 million from RM97.9 million in the previous corresponding Quarter.
The improved profitability was mainly contributed by an increase in investment income and a lower provision for fair value losses on the investment. Net Profit Attributable to Shareholders for the 4th Quarter stood at RM83.6 million, a 14.4% increase from RM73.1 million achieved in the 4th Quarter of FY2021. Net Return on Equity for the same period under review was higher at 3.8% from 3.4% while Earnings Per Share came in at 20.97 sen as compared against 18.34 sen recorded in the previous corresponding quarter.
The Group’s wholly-owned insurance subsidiary, Lonpac Insurance Bhd (Lonpac), similarly reported improved performance for the 4th Quarter of FY2022. Its Profit Before Tax registered a 15.1% increase to RM114.1 million from RM99.1 million recorded in the previous corresponding Quarter, due mainly to lower fair value losses provision on investment and higher interest income. Lonpac registered a 2.2% increase in its Gross Premium Income to RM371.1 million from RM363.0 million achieved in the 4th Quarter of FY2021 while its Net Earned Premium Income improved by 4.6% to RM268.2 million from RM256.3 million. However, Lonpac continued to see an increase in claims frequency and value with its Claims Incurred Ratio deteriorating to 40.5% from 37.7% in the previous corresponding Quarter.
For the 12 months ended 31 December 2022, Lonpac’s Claims Incurred Ratio increased to 44.0% from 36.5% reported in FY2021. Higher claims frequency and increased claims costs arising from inflationary pressures contributed to the higher claims ratio. With Management Expense Ratio higher at 21.2% and Commission Ratio at 6.0%, Lonpac’s Combined Ratio
for FY2022 jumped to 71.2% from the 62.5% reported in FY2021. As a result, its Underwriting Profit was 24.9% lower at RM285.1 million from RM379.7 million achieved in the previous corresponding period. The Motor class of insurance continued to record elevated claims, with the segment’s Claims Incurred Ratio coming in at 77.1% from 60.7% reported in FY2021.
With the reduced profitability reported by Lonpac, LPI Group registered a 14.6% lower Profit Before Tax at RM373.5 million as compared to RM437.3 million recorded in FY2021. Net Profit Attributable to Shareholders came in at RM276.6 million, 19.8% lower than RM344.7 million achieved in FY2021, partly affected by the implementation of a one-off Prosperity Tax for 2022.
Net Return on Equity for LPI Group reported at 12.7% for FY2022 as compared to 16.1% in FY2021 while its Earnings Per Share recorded at 69.43 sen, reduced from 86.52 sen achieved in FY2021.
