The preneed industry reported a 26.53-percent growth in net income in the final three months of 2016 amounting to P2.07 billion, such growth traced to the expansion in the sale of life-plan policies, according to the Insurance Commission (IC).
According to Insurance Commissioner Dennis B. Funa, unaudited financial statements submitted for the quarter show industry profitability having expanded by over 26 percent compared to 2015 level of only P1.64 billion.
“Based on the unaudited financial statements submitted by preneed companies as of the quarter ending December 30, 2016, six companies reported significant increases in its net income ranging from 51.86 percent to 895.69 percent compared to the same period in 2015,” Funa said.
Total premium for the industry declined by less than 1 percent to P16.29 billion in the fourth quarter last year, from P16.36 billion in 2015. Investment in trust funds grew 1.17 percent to P101.26 billion, while preneed reserves rose by 3.82 percent to P96.34 billion for the year.
The preneed industry sold 697,869 plans with a total contract price of P28.19 billion. This was an increase of less than 1 percent, from the 694,163 plans sold in the same period in 2015, equivalent to a total contracts sold amounting to P27.79 billion.
“This increase can be attributed to the significant increase in the number of life plans sold by seven preneed companies actively engaged in selling life plans, which take up 97.53 percent of the total number of plans sold by the industry,” he added.
Meanwhile, the sale of life plans rose 1.35 percent year-on-year to 680,649 in 2016, from 671,564 plans in 2015. But the number of pension plans sold during the quarter declined by 24.70 percent, from 21,684 to 16,328. Preneed educational plans also fell 2.51 percent from 915 to just 892.
Total assets of the preneed industry expanded by 2.62 percent to P120.10 billion in 2016, from P117.01 billion in 2015.
He attributed the increase to the 23.11-percent increment in assets of just one preneed company. Six other preneed companies posted increases ranging from 0.27 percent to 11.23 percent in 2016.
“In 2010 when the IC assumed regulation and supervision over preneed industry by virtue of the Pre-Need Code of the Philippines, the preneed industry reported a total of 162,520 plans sold. As of end of 2016, this number increased by 329.40 percent, or to 697,869 plans sold. Based on this tremendous increase, it is safe to conclude that the public has regained trust and confidence in preneed products and services,” Funa said.
The top 3 preneed companies in terms of number of life plans sold include St. Peter Life Plan Inc., Eternal Plans Inc. and PhilPlans First Inc.
The top three companies in terms of pension plans sold include Caritas Financial Plans Inc., PhilPlans First Inc. and Eternal Plans Inc. As for the number of educational plans sold, the lone company actively engaged in selling education plans in 2016 was PhilPlans First Inc.