KUALA LUMPUR (Jan 29): LPI Capital Bhd's net profit for the fourth quarter ended Dec 31, 2018 rose 1.2% to RM84 million from RM83 million a year earlier, despite a challenging operating environment for the Malaysian insurance sector.

In a filing to Bursa Malaysia today, LPI Capital said revenue for the quarter increased 7% year-on-year to RM389.03 million from RM363.49 million.

Earnings per share was 21.09 sen versus 20.83 sen a year earlier.

LPI Capital declared a second interim dividend of 42 sen per share, payable on Feb 27.

For the full year ended Dec 31, LPI Capital posted higher net profit of RM314.05 million compared to RM313.79 million a year ago. Revenue increased to RM1.51 billion from RM1.47 billion previously.

In a separate statement, LPI Capital founder and chairman Tan Sri Teh Hong Piow said the increase in revenue was mainly contributed by higher premium written by its wholly-owned insurance subsidiary, Lonpac Insurance Bhd.

"Lonpac, with its strengthened distribution channels, continued to expand its business portfolio as it believed that with the highly competitive environment under the liberalisation framework, it needs to compensate compressed underwriting margin with a larger market share.

"Lonpac, in 2018 financial year, improved its market position despite the highly competitive market conditions and slower demand for insurance," he said.

Moving forward, Teh said the intensifying implementation of Bank Negara Malaysia's liberalisation framework presents new challenges to all players in the industry especially the fire and motor classes of business.

"Insurance players looking to increase their market share rolled out competitively priced products which exerted greater pressure on margins and eroded profitability," he said.