Pre-need firms post P1.2 billion loss

MANILA, Philippines — The pre-need industry incurred a net loss of P1.2 billion in the first quarter as insurance firms reported lower sales of life and pension plans, according to the Insurance Commision.

The latest figure was a reversal of the P222 million net income recorded a year ago.

IC Commissioner Dennis Funa said only 11 licensees disclosed their financial performance in the first quarter, down from last year’s 15.

Premiums sold by pre-need firms also slid by more than one percent to P4.76 billion from P4.81 billion due to double-digit drop in plans bought by policyholders. The number of pre-plans sold went down by more than 30 percent to 134,225 from 191,868, the IC said.

During the review period, pre-need providers sold 133,195 life plans, down from 191,195 a year ago while the number of pension plans sold went down to 364 from 673. A repeat from 2020’s experience, the industry also failed to sell any educational plans in the first quarter due to lingering uncertainties on when face-to-face learning will resume.

The industry’s net worth expanded by more than 44 percent to P15.54 billion as  retained earnings reached P1.89 billion, a reversal of last year’s net loss of P2.92 billion.

Assets managed by pre-need firms rose by over 13 percent to P101.38 billion, outpacing the nine percent growth in their liabilities worth P85.83 billion.

Also, investments poured in the trust fund account jumped by about 14 percent to P88.49 billion from P77.91 billion, coinciding the sevenfold surge in inventories to P5.34 billion.

Among industry players, St. Peter Life Plan Inc. recorded the largest net worth of P12.04 billion, but also incurred a net loss of P942.38 million in the first quarter. Manulife Financial Plans Inc., posted the second highest net worth at P1.73 billion, but registered a net loss of P117.62 million.

Eight of the 11 firms which disclosed their financial status incurred a net loss during the first quarer. Only three reported profits, namely, Sunlife Financial Plans (P5.42 million), Golden Future Life Plans (P3.17 million) and Cityplans Inc. (P760,000).

Last year, pre-need firms reported a net income of P1.4 billion from a net loss of P718.6 million in 2019, according to the IC.

However, premiums sold by the industry plunged by more than 15 percent to P18.64 billion due to an across the board drop in plans bought by policyholders.