Pre-need industry income surges to ₧2.1B

THE pre-need industry saw its total net income surging to P2.1 billion last year as it sold more life plans amid the Covid-19 pandemic.

Latest data from the Insurance Commission showed total net income of the industry jumped by 36.73 percent from P1.55 billion in the same period in 2020.

Of the 11 operational pre-need companies that submitted their financial performance report to the regulator, six reported having net income during the period while the rest reported net loss. There are currently 12 licensed pre-need companies but the Insurance Commission said New Life Memorial Plan is non-operational since it obtained its license in 2020 as it has yet to have its life plan product approved.

Topping the list of pre-need companies in terms of total net income is Saint Peter Life Plan Inc. with P2.2 billion.

Insurance Commissioner Dennis B. Funa said the growth in the pre-need industry’s net income was driven by the rise in sales of memorial or life plans during the period.

Life plans accounted for the bulk of the 564,579 total plans sold last year. Sales of life plans soared by 49.59 percent year-on-year to 563,186 from 376,495 in 2020.

On the other hand, pension plans dropped by 28.34 percent to 1,393 from 1,944 in the previous year.

“The increase may be attributable to the increase in awareness on the importance of pre-need plans during the time of pandemic. Saint Peter contributed the majority of the plan sold with around 540,236 sold in 2021,” Funa told the BusinessMirror in a message.

Nonetheless, pre-need companies’ total premium income last year hit P19.76 billion, posting a double-digit growth of 11.06 percent from P17.79 billion in 2020.

Meanwhile, pre-need industry players’ assets rose by 9.47 percent year-on-year to P111.63 billion from P101.98 billion. Total industry’s net worth, however, dipped to P17.78 billion from P18.05 billion in 2020.

Pre-need reserves, which include benefit obligations/payables as mandated by the Pre-Need Code, climbed by 11.56 percent to P89.97 billion from the previous year’s P80.65 billion.

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