Lonpac considers Vietnam and Laos

Lonpac is considering entering Vietnam and Laos markets. In Cambodia, Lonpac has operations via Campubank Lonpac Insurance Plc. The company has about 15% market share in Cambodia with less than 3 years operations.

Source: The Star

Insurance outlook

Summary of views of various industry players on insurance outlook in 2H 2009:

Great Eastern

• The worst is over, export industry picking up, companies started recruiting
• 2H to be better than 1H
• Expect double-digit growth for whole year
• Distribution channel and products are key growth drivers

LPI Capital

• Export and construction sectors will provide growth
• Marine and fire insurance will benefit
• Need to be prudent in underwriting and have strong claims management in view of rising motor insurance claims (bodily injury and motor theft)

Manulife

• Regardless of economic cycles, insurance performs well
• Stimulus plans are positive
• External factors may affect growth pace
• Equity markets have not stabilised

Source: The Star

Better Q2 results for Lonpac

Lonpac has achieved a good performance in Q2 2009:

• Revenue: RM166.3 mil (Q2 2009) vs RM144.3 mil (Q2 2008)
• Net profit: RM22.7 mil (Q2 2009) vs RM17.9 mil (Q2 2008)
• Underwriting surplus: RM25.0 mil (Q2 2009) vs RM18.4 mil (Q2 2008)

Source: Bursa, The Star

Views on Premium Rebates

Various parties have come forward to express their views on premium rebates:

Fomca

• Welcome BNM's move
• Want the rebate to be extended to life policies as well

NUBE

• In the long run detrimental to consumers, agents and insurance industry
• Agents play a role especially in reaching to the remote areas
• Will cause a huge unemployment problem

PIAM

• Trend is towards diversification of distribution channels
• Increasing demand for agents who could offer a comprehensive financial advisory package
• Customers who are comfortable with and appreciate the services provided by agents will continue to deal through agents

Lonpac

• Agents not affected if they provide good service and are familiar with their products
• Agents can assist in handling claims

Source: Business Times, The Star 1 & 2

Lonpac sets targets

Some of the plans/targets set by Lonpac:

• 15% gross premium growth in 2009
• Opening of new branches, at least 5 by 2010, currently 15 branches
• New branches: Klang & Tawau (2009); Johor, Sabah & Sarawak (2010)
• Strengthening agency force, grow by 20% to 1,600 in 2009
• Improve delivery system
• Maintain market share in Fire and Miscellaneous, contributions of these 2 classes to its business stand at 43.2% and 36.7% of gross premium

Lonpac has a CAR of 176%.

Source: Business Times

LPI expects claims ratio to be in control

LPI does not expect a sharp spike in its claims ratio, which can occur during poor economic conditions. However demand for marine insurance may drop due to the reduction in import and export trade.

LPI has limited exposure to equties and it was unaffected by the bearish stock market.

Source: The Star

Lonpac's underwriting profit improves

LPI Capital Bhd's has achieved a strong improvement in underwriting profit in Q1 2009 compared to Q1 2008. The underwriting profit is RM10.4 mil, an increase of RM6 mil.

Other financial highlights:

• Group revenue rose 13.6% to RM210.9 mil
• EPS increased 29.4% to 25.77 sen
• Shareholders' equity grew by 78% to RM647.1 mil, compared with RM363.7 mil at 31/12/2008
• Total assets increased by 40% to RM1.19 bil in Q1 2009

Source: The Star

Lonpac Delivers Despite Tough Environment

Lonpac Insurance has quite impressive scorecard despite difficult economic environment:

• 14% growth in net premium income (RM293.2 mil compared with RM257.1 mil)
• Solvency margin surplus of RM221.2 mil on top of the minimum required solvency margin of RM490.2 mil)

The holding company LPI Capital saw 14.4% growth in net profit and 16.6% growth in revenue.

Lonpac's investment portfolio: 70% in FD, 20% in equities (mainly in Public Bank shares) and 10% in government securities.

Source: The Star

Improved Underwriting Profits despite Soft Market

Lonpac has improved its underwriting profits by 8.6% to RM22.8 mil despite operating in a very soft and competitive market. Premium rates were eroded in such a market. Lonpac recorded underwriting surplus in all classes of insurance and registered a higher solvency margin surplus of RM199.7 mil above the minimum required solvency margin of RM490.2 mil.

Gross premium income grew to RM292.5 mil from RM257.1 mil and net income grew 15.5% to RM192.3 mil from RM166.5 mil.

Source: The Star & Business Times

Lonpac's New CEO

Tan Kok Guan is the new CEO of Lonpac Insurance Bhd, effective April 9, replacing Tee Choon Yeow. Tee will remain the CEO of LPI Capital Bhd.

Source: The Star