KUALA LUMPUR (Oct 28): LPI Capital Bhd (KL:LPI) said it will tighten underwriting as well as adopt new risk and pricing models amid mounting challenges in the general insurance industry following its latest quarterly results.

The sector is expected to post moderate premium growth in 2025, in line with the broader economy, while continuing to face heightened underwriting pressure, particularly in the motor, medical, and catastrophe-related segments, LPI Capital said in an exchange filing on Tuesday.

“Increased frequency and severity of weather events, especially flooding in Malaysia, will continue to challenge underwriting results,” LPI Capital flagged.

For the three months ended Sept 30, 2025 (3QFY2025), LPI’s net profit fell 7.4% to RM114.83 million when compared to the same quarter a year earlier. Higher costs and lower income from an associate dragged despite revenue rising 9.9% year-on-year to RM549.31 million.

No dividend was declared for the quarter.

LPI Capital also said that rising medical inflation and higher utilisation have led to worsening claims in its portfolio. The combined ratio — an industry profitability metric that measures claim-related losses and expenses as a proportion of earned premium — could remain under pressure, it noted.

In response, the company said it will “closely monitor its medical portfolio and adopt product redesign and risk repricing within the regulatory approved range” while utilising artificial intelligence and automation “to enhance claims management and improve customer experience”.

For its first nine months of FY2025, net profit slipped 2.4% to RM296 million against the same period last year, while revenue increased 9.3% year-on-year to RM1.57 billion.

Shares of LPI Capital, controlled by Public Bank Bhd (KL:PBBANK), were down four sen or 0.28% at RM14.30 ahead of the results announcement, giving the insurer a market capitalisation of RM5.7 billion.