Preneed sector posted P1.15-B net loss in Q1 as sales plunged | Inquirer Business
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Preneed sector posted P1.15-B net loss in Q1 as sales plunged

By: - Reporter / @bendeveraINQ
/ 05:24 AM October 08, 2021

The preneed sector posted a P1.15-billion net loss in the first quarter as sales took a hit from the pandemic-induced economic slump.

The latest Insurance Commission (IC) data on Thursday showed preneed firms’ combined net income turned red at the start of the year, reversing the P222.1-million net income recorded as of end-March last year.

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The 12 preneed companies covered by the IC report eked out P9.4 million in revenues during the first three months but losses were bigger at P1.16 billion.

30% drop

The regulator said the number of plans sold from January to March dropped 30 percent to 134,225 from 191,868 a year ago.

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Life plans sold to preneed clients declined 29.9 percent to 133,861 from a year ago’s 191,195.

The number of pension plans sold during the three-month period also slid 45.9 percent to 364 from 673 last year.

Preneed players nonetheless posted larger assets and net worth of P101.4 billion (up 13.3 percent year-on-year) and P15.5 billion (up 44.1 percent), respectively, as of March, given their compliance with the capitalization requirement of at least P900 million.

As such, reserves increased by almost a tenth to P82.2 billion, ensuring the sector’s viability under the Pre-Need Code.

Over 200 preneed firms were operating in the country until the Asian financial crisis in the late 1990s toppled most of them.

The problem peaked in the mid-2000s when big industry players, such as College Assurance Plan and Pacific Plans Inc., could no longer service their obligations to plan holders.

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TAGS: Insurance Commission (IC), Net loss, preneed sector
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