This article first appeared in The Edge Financial Daily on January 30, 2019

KUALA LUMPUR: General insurer LPI Capital Bhd posted a marginal 1.2% growth in net profit to RM84 million for the fourth quarter ended Dec 31, 2018 (4QFY18) from RM83 million a year ago, mainly contributed by its investment holding segment.

This resulted in improved earnings per share of 21.09 sen for 4QFY18 compared with 20.83 sen for 4QFY17.

Quarterly revenue also rose 7% to RM389.03 million from RM363.49 million in 4QFY17, which the group’s founder and chairman Tan Sri Dr Teh Hong Piow attributed the increase to higher premium written by its wholly-owned insurance subsidiary Lonpac Insurance Bhd.

It declared a second interim dividend of 42 sen for FY18, payable on Feb 27.

For the full FY18, LPI Capital posted a flat net profit at RM314.05 million compared with RM313.79 million in the previous year, while overall revenue for FY18 was up 2.9% to RM1.51 billion from RM1.47 billion in FY17.

The growth in revenue was largely contributed by the general insurance segment, which registered an increase of 2.9% to RM1.48 billion compared with RM1.44 billion in FY17.

“Lonpac, in FY18, improved its market position despite the highly competitive market conditions and slower demand for insurance. Its gross premium income for the year increased by 3.4% to RM1.47 billion from RM1.42 billion written in the previous year,” said Teh.

He added that Lonpac continued to strengthen its position as the market leader in the preferred fire portfolio, with its written premium for fire insurance registering a growth of 11.1% over the previous year.

“Fire insurance remains the core portfolio of business contributing 42.4% of its total written premium.

“During the year, both motor and medical insurance portfolio also reported strong growth whereas engineering insurance suffered a decline in written premium, affected by the slowdown in the number of project risks and termination of government infrastructure projects,” said Teh.

Going forward, LPI Capital said the group will continue to systematically execute its business plans, which prioritise prudential risk management, organic growth and customer-centric focus with the aim to maximise shareholders’ value creation.