PETALING JAYA: LPI Capital Bhd recorded 18.51% decrease in net profit to RM31.5mil for its first quarter ended March 31 compared with RM38.6mil in the corresponding quarter due to higher claims.
The insurer, however, posted a 15.3% increase in revenue to RM246.061mil compared with RM213.328mil in the corresponding quarter last year.
The growth in revenue was contributed mainly by the general insurance segment, which grew 18.6% to RM230mil over the corresponding quarter in 2011.
Teh: ‘Our disciplined approach in risk selection and management allowed us to make controlled progress in executing our business plan for 2012.’
The increase was mainly contributed by higher gross earned premium for the quarter, which was in line with the strategic planning and business efforts of the group in growing the profitable insurance business.
Chairman Tan Sri Teh Hong Piow said the drop in profit was mainly due to the high frequency of catastrophic losses, and the unprecedented increased number of fire and motor claims, timing differences in accounting for the enlarged gross premium income through the provision of unearned premium reserves, and reduced investment income received.
“The unearned premium reserves as at March 31 stood at RM363.6mil rising by a whopping 15%.
“These extraordinary events have impacted our earnings adversely. Nevertheless, our disciplined approach in risk selection and management allowed us to make controlled progress in executing our business plan for 2012.
“With improved market recognition, our business units are in an excellent position to implement their respective growth strategies as reflected in the increased premium income for the first quarter of the year. Premium written for our core business has grown,” he said in a statement yesterday.
In an announcement to Bursa Malaysia, the group said that it was confident of increasing its market share and maintaining favourable growth.
It was also confident that it would maintain its earnings momentum and deliver satisfactory performance going forward.
“The challenges facing the global developed economies remained unabated and this has a negative effect on our market environment.
“We will continue to execute our business plan with a steadfast caution and agility.
“Our commitment to upholding strong corporate governance and create long-term shareholder value through unremitting growth and profitable results remains undiminished.
“The group is therefore confident that it would record better performance for the next quarter of the year,” Teh said. From: The Star Business
