Philam Plans records impressive growth rate

Despite the sluggish economy and the poor performance of the country’s pre-need industry, Philam Plans Inc. managed to record an annual growth rate in gross collections, from P2.74 billion in 2001 to P3.54 billion last year.

Philam Plans is a subsidiary of the Philippine American Life and General Insurance Co. (Philamlife) and the American International Group (AIG).

Based on data released by the prestigious Actuarial Advisers Inc., Philam Plans in fact ended 2002 on top of the country’s 46 pre-need companies. The firm had the highest volume of P8.1-billion thus allowing it to grab a market share of 21.55 percent.

"Our trust fund stood at P6.36 billion which is better by over 44 percent from last year," said Jesus G. Hofilena, Philam Plans president and chief executive officer.

Hofilena added that Philam Plans has a gross plans-in-force of 598,000. It recorded a net income of P126 million last year, lower than the P347 million income realized in 2001.

He explained that the pre-need company increased provisioning in its trust funds. In fact, it expects roughly P1.2 billion in excess funds by the end of the first quarter, which will partially end up in the trust funds.

The Securities and Exchange Commission (SEC) has ordered pre-need companies to increase their trust fund reserves in the face of deficits recorded by CAP Philippines Inc., one of the largest pre-need companies in the Philippines.

"That (CAP deficit in trust funds) had a strong negative on the industry, especially in the second half of 2002," industry sources said.

Of the top 10 companies in the industry, six recorded a drop in their performance last year compared to 2001.

The same sources said that Philam Plans is capable of recording a net income of between P400 to P500 million this year.

In terms of the different pre-need product sales, its pension plans reached P5.5 billion last year accounting for 24.7 percent of market share.

In the education plans market, it accounted for 17.9 percent making it the second best pre-need company in that market category.

Philam Plan’s market share in the life plans was ranked third best last year, accounting for almost 11 percent of the market.