MANILA, Philippines — The pre-need industry saw its net income surge by nearly five-fold to P2.09 billion in 2023 from P429.6 million in 2022 as more people availed themselves of life plans, data from the Insurance Commission (IC) showed.
The 385-percent jump in earnings was fueled by the 7.3 percent increase to P22.73 billion in premiums sold by the pre-need sector as demand for life plans slightly increased.
In total, the industry sold 749,154 pre-need plans in 2023, just slightly better than the 744,730 sold in 2022.
The bulk of these at 99 percent were life plans, which also moderately improved by a percentage in terms of the number of plans sold.
Pre-need plans are contracts that provide for the performance of future service, payment of monetary consideration or delivery of other benefits upon a certain maturity date. These include life, education and pension, among others.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said this may be attributed to the combination of increased incomes and financial literacy among Filipinos.
“Insurance is also one way to hedge against risks, such as higher prices, ironically,” Ricafort said.
“There is also the need to be more financially secure to insure Filipinos’ hard-earned property so they have less worries on any uncertainties, especially on homes, vehicles, investment and retirement plans,” he said.
The remaining 351 were pension plans, which dropped 69 percent from the 1,133 sold in 2022. Education plans also slipped 16 percent to just 37.
The IC noted that investments in trust funds inched up by 7.4 percent to P128.03 billion while pre-need reserves increased by 7.5 percent to P122.33 billion.
As mandated by the pre-need code, pre-need providers keep a reserve to cover benefit payables.
Following the increases, the industry saw its asset base improve by eight percent to P152.34 billion while liabilities also increased by seven percent to P129.12 billion.
Total net worth also climbed by 11 percent to P23.22 billion.
Latest pre-need figures covered a total of 18 firms, up from 17 in 2022. Of the total, 16 are licensed and two are servicing companies.
St. Peter Life Plan Inc. sold the most number of life plans at 736,726 with a contract price of P40.5 billion. It recorded the largest net worth of P16.19 billion and is the most profitable at P2.36 billion.
PhilPlans First Inc. came in second in terms of life plans sold, with 4,558 worth P657.09 million.
Cosmopolitan Climbs Life Plan Inc. issued 4,421 plans worth P206.57 million, and Trusteeship Plans Inc. signed off 1,466 valued at P60.31 million.
Seven of the 18 firms that disclosed their financial status incurred a net loss last year. These are PhilPlans First Inc. (P362.47 million), Sunlife Financial Plans (P115.73 million) Ayala Plans Inc. (P6.35 million), AMA Plans Inc. (P6.34 million), Freedomlife Plan Corp. (P4.19 million), First Union Plans Inc. (P1.86 million) and Mercantile Care Plans Inc. (P1.43 million).
Only PhilPlans sold pension and education plans last year, releasing 351 and 37 worth P157.19 million and P15.36 million, respectively