Insurance Commision PH | INQ
MANILA, Philippines—The pre-need industry’s net income rose 36.7 percent to P2.1 billion in 2021, as both sales value and volume increased.
The latest Insurance Commission (IC) data showed that the total bottom line of the country’s 12 pre-need players last year climbed by over a third from P1.5 billion in 2020.
Their combined premium income grew 11.1 percent to P19.8 billion from 2020’s P17.8 billion.
In terms of number of plans sold, the sector totaled 564,579 in 2021, up 49.2 percent from 378,439 in 2020, as a jump in life plan sales offset the decline in pension plans.
Pre-need firms sold 563,186 life plans last year, 49.6-percent higher than the 376,495 in 2020.
On the other hand, pre-need companies’ pension plan sales dropped 28.3 percent to 1,393 from 2020’s 1,944.
The IC data showed there was no education plan sold in 2021, unlike in 2020 when industry sales reached 267.
Total sales last year, however, remained below the 925,370 plans sold in 2019, pre-pandemic.
Insurance Commissioner Dennis Funa told the Inquirer last January that the prolonged COVID-19 pandemic may have increased the awareness for pre-need plans among consumers who wanted additional protection.
In 2021, the industry hiked its total assets by 9.5 percent to P111.6 billion as well as pre-need reserves by 11.6 percent to P89.9 billion. However, their total net worth declined by 1.5 percent to P17.8 billion last year due to a much larger deficit in retained earnings, which amounted to P9.5 billion or 742.9-percent bigger than in 2020. Liabilities also rose 11.8 percent to P93.9 billion.
At its height, the pre-need sector had more than 200 players until the 1997-1998 Asian financial crisis hit many of them.
Pre-need firms further dwindled during the mid-2000s, when popular companies like College Assurance Plan (CAP) and Pacific Plans Inc. collapsed, as they could no longer service their obligations to plan holders.