Some powerful spots forward for LPI Capital

KUALA LUMPUR: Kenanga Analysis mentioned LPI Capital Bhd might face headwinds because the insurance coverage claims ratio is anticipated to rise to pre-pandemic ranges amid growing exercise in the course of the nation’s endemic part.

In a notice, the analysis agency mentioned motor claims are anticipated to extend with the resumption of financial exercise, prompting a discount in its earnings projections for LPI for FY22 and FY23.

As well as, Kenanga anticipates continued competitiveness within the fireplace insurance coverage area, which can additional add to stress in LPI Capital Bhd’s key phase.

“The hearth insurance coverage area will prone to proceed its aggressive streak from 2017’s detariffication with an upcoming overview in 2HFY22 prone to steer in the direction of extra consumer-centric pricing fashions.

“That mentioned, any adjustments from additional liberalization would solely have an effect on new insurance policies,” mentioned the analysis agency in a report.

Kenanga slashed its FY22 and FY23 projections by 19% and 11% to replicate the potential draw back.

It maintained “market carry out” on the inventory however decreased its goal value to RM14.10 from RM14.20 beforehand.

In its latest earnings 1QFY22 announcement, internet earnings arrived at RM61.5mil, which made up 19% and 18% of Kenanga’s and consensus full-year estimates respectively.

“The damaging deviation got here from top-line weak spot as we had anticipated internet earned premiums (NEP) to develop fairly than decline, no because of lower-than-expected retention ratios,” mentioned Kenanga.


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