Business

Saturday October 31, 2009

Lonpac keen to boost regional presence

By DALJIT DHESI


KUALA LUMPUR: General insurer Lonpac Insurance Bhd is eyeing the Vietnam and Laos markets to boost its presence in the region, said chief executive officer Tan Kok Guan.

It had been conducting feasibility studies in the two countries, he said. A wholly owned subsidiary of LPI Capital Bhd, Lonpac currently has operations in Singapore and Cambodia.

“There is potential market for insurance (products) in Vietnam and Laos as these markets are growing and there is demand for general insurance. We are studying and assessing these markets as well as other regional markets before penetrating them.

“We will first need to strengthen our Cambodian operations before embarking to other regional markets,” he told StarBizWeek.

In addition, Lonpac could tap on Public Bank Bhd’s (PBB) customer base in Vietnam, he said. LPI Capital and PBB have a common shareholder in Tan Sri Teh Hong Piow, who is also chairman of PBB and non-executive chairman of LPI Capital.

Tan said Lonpac had operations in Cambodia via Campubank Lonpac Insurance Plc, a joint venture company with PBB.

According to Tan, in less than three years the company had garnered about 15% market share in Cambodia and was now making underwriting profits.

For its Singapore branch, he said its business portfolio had been restructured to underwrite more personal lines such as personal accident and foreign workers’ scheme from motor insurance previously. The move had resulted in it turning profitable, he added.

In Malaysia, Tan said Lonpac was strong in fire insurance which now made up about 35% of the company’s total portfolio, followed by motor at about 30%.

He said it was planning to further grow the fire insurance portfolio, especially in the small and medium enterprise (SME) segment. It was also looking to expand the property and personal lines business for SMEs.

Liability insurance was another area of focus for Lonpac moving forward as it was less competitive with few players in the market.

The company currently ranked fourth in market share in liability insurance in terms of total gross premiums, he added.

On its distribution channels, agency was still the dominant channel contributing about 40% of its total business portfolio, followed by bancassurance (about 28%).

Tan said Lonpac was planning to beef up its agency force of more than 1,300 currently and expected more than 10% growth this year.

Asked whether Lonpac was looking into acquisitions, he said: “At the moment, the board has no plans for acquisitions as it wants to grow organically. We want to strengthen our marketing force and presence via organic growth.”

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