By Rupinder Singh
GENERAL insurer Lonpac Insurance Bhd is putting on hold its plans to venture into other overseas countries to focus on growing its operations in Cambodia as well as Singapore.
A wholly-owned subsidiary of LPI Capital Bhd (8621), Lonpac currently has operations in Singapore and Cambodia.
"Cambodia has been a success story and represented a learning curve for us. The challenge now for us to build our market share in Cambodia further," Lonpac's adviser Tee Choon Yeow told Business Times.
In three years since it started business in Cambodia, the insurer has gained 20 per cent market share where the total industry gross premium is only US$20 million (RM61 million) shared among six insurers.
Lonpac aims to capture a 35 per cent market share in Cambodia in the next five years while generating a return on equity of 25 per cent.
Lonpac has consecutively made underwriting profits from the first year in Cambodia and therefore sees a lot of potential in the kingdom.
In 2010, Lonpac's regional business in Cambodia contributed a net profit share of RM743,000.
Domestic operations contributed 98.9 per cent of the group's profit before tax last year.
LPI Capital and Public Bank Bhd (PBB) have a common shareholder in Tan Sri Teh Hong Piow, who is also chairman of PBB and non-executive chairman of LPI Capital.
Lonpac operations in Cambodia is via Campubank Lonpac Insurance Plc, a joint venture company with PBB.
Lonpac is planning to open another branch in Siem Reap this year when business volume is big enough and aims to tap into PBB's customer base.
PBB unit Cambodian Public Bank plc has carried out commercial banking business in Cambodia since May 1992 and currently has 20 branches strategically located in the country.
For its Singapore branch, he said its business portfolio had been restructured to underwrite more personal lines businesses from the volatile motor insurance previously.
The move is expected to help the Singapore unit to break even and show a small underwriting profit.
Although the Cambodia and Singapore units are still not a significant contributors, Tee expects both ventures to contribute 20 per cent to the group in five years. - By Rupinder Singh