,LPI chairman and founder Tan Sri Dr Teh Hong Piow said the strict lockdown amid a prolonged weak economic environment would cause serious consequences to many businesses especially small and medium enterprises and micro enterprises which are not allowed to operate.
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KUALA LUMPUR: LPI Capital Bhd reported higher net profit of RM83.29mil in the second quarter ended June 30, 2021 (2Q21), boosted by an increase in earnings from the general insurance segment as underwriting profit expanded.
It reported on Thursday its net profit rose by 8.4% from RM77.40mil I 2Q20 Its revenue increased by 5.1% to RM419.99mil from RM399.54mil. Earnings per share were 21.07 sen compared with 19.43 sen.
It declared a first interim single tier dividend of 29 sen per share which will go ex on Aug 20.
Elaborating on the 2Q21 results, it said profit before tax of the group grew by 9.6% to RM109.90mil from RM100.30mil a year ago.
LPI Capital said the growth was contributed by profit from the general insurance segment, which increased by 10.2% to RM111.7mil from RM101.4mil a year ago.
Underwriting profit in 2Q21 increased by 23.6% or RM16.90mil to RM88.40mil from RM71.50mil previously, mainly contributed by the lower net claims incurred as compared to a year ago.
The investment holding segment recorded a higher loss before tax of RM1.80mil as compared to RM1.10mil a year ago mainly due to lower investment income received during the current quarter ended June 30, 2021.
LPI chairman and founder Tan Sri Dr Teh Hong Piow said the strict lockdown amid a prolonged weak economic environment would cause serious consequences to many businesses especially small and medium enterprises and micro enterprises which are not allowed to operate.
He said many are looking into various options to cut costs in order to weather the storm resulting in dampened demand for insurance products.
“The improvement in its revenue was mainly contributed by the increase in the gross earned premium of its insurance unit, Lonpac Insurance Bhd (Lonpac).
“The strong underwriting results of Lonpac in the 2Q was the main factor contributing to the improved profitability of LPI,” he said.
Teh said Lonpac reported an impressive performance for 2Q21 despite the imposition of Phase 1 of the National Recovery Plan on 1 June 2021 which resulted in a reduction of economic activities.
Profit before tax for 2Q21 rose an impressive 10.3% to RM111.20mil from RM100.80mil.
Lonpac recorded a commendable 23.6% increase in its underwriting profit to RM88.40mil from RM71.50mil a year ago due to lower claims incurred ratio.
Its claims incurred ratio reduced to 35.8% from 45.6% with most major classes of insurance registering lower ratios.
“With management expenses at 22.5% and commission ratio at 6.0%, Lonpac improved its combined ratio to a low 64.3% from 71.6% achieved in 2Q20,” he said.