LPI Capital Berhad (KLSE: 8621.KL) is a general insurance company listed in Malaysia. It has business in three countries, namely, Malaysia, Singapore, and Cambodia.

The term ‘general insurance’ can seem a little vague, so here’s more colour on LPI Capital’s business. The company essentially offers a range of insurance products such as fire insurance, motor insurance, marine insurance, and more.

LPI Capital’s stock has performed well in the last five years, with its price climbing by 90%.

This prompted me to learn more about the company and how it makes its money. Investors in Singapore-listed insurance companies such as United Overseas Insurance Limited (SGX: U13) may find it interesting to have a deeper understanding of LPI Capital’s business.

There are two ways that LPI Capital makes money. The first is by providing insurance products.

An insurance business works by first receiving insurance premium, then paying out those premiums in the form of claims by customers and administrative expenses. If the premium received is higher than the claims paid and administrative expenses, an insurance business is profitable.

By: Lawrence Nga

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