Pre-need industry posted P718.6-million loss in 2019, says IC

Pre-need companies sold more plans last year, but the industry incurred a net loss of P718.6 million due to bigger liabilities.

Citing unaudited interim financial statements, Insurance Commissioner Dennis B. Funa said on Friday (May 29) that 14 pre-need firms’ combined 2019 bottom line was a reversal of the P2.16-billion net income posted in 2018.

The industry’s total sales, measured by premium income, improved 11.51 percent to P22 billion, which Funa attributed to an “18.94-percent increase in plans sold from 778,033 plans in 2018 to 925,370 plans in 2019.”

“Notably, 914,781 plans or 98.86 of the plans sold [last year] are life plans,” Funa added in a statement.

However, total liabilities grew 3.81 percent to P112.78 billion as reserve liabilities rose 4.42 percent to P108.65 billion.

Pre-need reserves increased 3.68 percent to P103.33 billon, while benefit obligations or payables climbed 21.31 percent to P5.32 billion.

“This considerable increase in the pre-need industry’s liabilities contributed to the net loss” in 2019, Funa explained.

Industrywide assets inched up 3.86 percent to P131.39 billion in 2019.

The pre-need sector’s net worth increased 4.18 percent to P18.61 billion, but aggregate capital stock declined 7.4 percent to P3.65 billion.

Combined trust fund investments grew 4.59 percent to P117.85 billon, while retained earnings more than doubled to P9.44 billion.

Edited by TSB