KUALA LUMPUR: LPI Capital Bhd‘s net profit for the primary quarter ended March 31, 2022, fell 25.25% to RM61.53mil from the identical quarter a 12 months in the past owing to a better claims ratio and a lacklustre efficiency in the funding portfolio.
The insurer reported that income got here in at RM397.7mil, 9.8% decrease as in comparison with RM440.8mil in the corresponding quarter in the earlier 12 months due primarily to decrease gross earned premium.
Net return on fairness was 2.9% whereas earnings per share dropped 25.3% to fifteen.44 sen.
For the quarter, the group’s wholly owned subsidiary Lonpac Insurance Bhd registered a 13.4% drop in pre-tax profit to RM61.2mil.
“The profitability of Lonpac for 1Q2022 was partly affected by the extra prices of RM6.4mil incurred for the reinstatement of reinsurance in consequence of final December’s main flood occasion.
“Lonpac’s 1Q2022 efficiency was additionally affected by the rise in its technical reserve,” mentioned group chairman Tan Sri Teh Hong Piow in a press release.
In 1Q22, Lonpac’s net unearned premium reserve (UPR) elevated RM54.4mil as in comparison with a rise of RM42.9mil in 1Q21, as a result of adoption of a extra conservative strategy in the computation system for its mortgage-related private accident insurance coverage portfolio.
The normalisation of claims ratios arising from reopening of financial system and improve in enterprise and social actions had additionally contributed to a rise in claims and lowered Lonpac’s Underwriting Profit.
Underwriting profit dove 43% to RM52.6mil with the will increase in claims incurred ratio, administration expense ratio and fee ratio.
Lonpac’s net earned premium revenue fell 14% to RM217.2mil regardless of its gross premium revenue rising 1.3% to RM476.6mil, as a result of greater UPR and reinsurance outwards in 1Q22.
Despite the sluggish begin to the 12 months, Teh says the reopening of the financial system and the resumption of enterprise actions will result in a rising demand for insurance coverage.
“Though the LPI Group confronted some headwinds in its efficiency for 1Q2022, the Group is assured that with its strengthened distribution channel and concerted efforts in executing its marketing strategy, LPI will be capable to report passable efficiency for the rest of FY2022,” he mentioned.