Philam Plans expects 70% growth in net profit this year

Leading pre-need firm Philam Plans Inc. is eyeing a 70-percent growth in its net income by yearend on the back of new product offerings and aggressive marketing efforts.

Philam Plans president and chief executive officer Jesus G. Hofilena said the company is looking at a net income of P200 million by the end of the year, higher than the P112-million profit reported in 2003.

"We’re looking at close to P200 million in profit this year. It’s a target, something we’d like to achieve this year," Hofilena said.

Hofilena said Philam Plans is also targeting a 20-percent sales growth from the P1.3-billion first year payments it generated last year.

For August alone, new sales have grown by 25 percent while year-to-date sales have increased by 19.2 percent.

He said the growth will be driven by the company’s enhanced marketing capabilities and aggressive stance in the pre-need innovation and target market expansion that allowed it to make breakthroughs in sales despite the slowdown in the pre-need industry.

The number of plans sold by the pre-need firm jacked up by 43.89 percent even as industry levels went down 5.53 percent.

Philam Plans emerged as the number one pre-need firm with 26.85-percent market share or P6 billion in pre-need plan sales for the first seven months of the year, exceeding the second rank pre-need company by P2 billion in sales or more than nine percent in market share.

The company continued to dominate the pension plan market with 30 percent total share, posting P2.86 billion in volume sales.

It was also the top seller for education plans, accounting for a quarter of the total market with sales value of P1.96 billion.

Hofilena said Philam Plans is open to acquiring existing pre-need firms should there be a good offer.

"We were given clearance to look into ways to expand business. We’re open to it but we’re not pursuing it aggressively. It needs further study. We want something that will give strategic benefits to us," he said.

"Somebody has sent us feelers but haven’t looked seriously into these proposals," he added.

Hofilena said Philam will be offering more innovative plans and services this year as it eyes greater participation from overseas Filipino workers.

An enhanced educational plan is expected to be launched by yearend to maintain its dominance in the industry.

Philam Plans contributed P2.06 billion in to its trust funds in the span of only seven months beginning January this year, bringing total trust funds to P12.6 billion as of end-July.

Majority of the funds are safely invested in secured and liquid investments such as government securities to ensure that the company is able to meet its obligations to planholders at any given time.

Philam Plans is a subsidiary of the Philippine American Life and General Insurance Co. (Philamlife), the number one life insurance company in the country. AIG, on the other hand, is the leading US-based international insurance organization and the largest underwriter of commercial and industrial coverages in the US.