Pre-need industry returns to profitability

MANILA, Philippines  -The country’s pre-need industry returned to profitability in the third quarter, the Insurance Commission (IC) reported, as an increase in the number of new plans sold during the period helped reverse losses from hefty benefit payments a year ago.

The sector netted P1.79 billion in the July-September period, a turnaround from P7.11 billion net loss recorded last year, the IC said in a statement.

Figures showed pre-need firms sold close to 600,000 plans in the first three quarters, most of which were memorial plans. That was a 12.83 percent increase year-on-year, lifting the industry’s total premium income by 8.28 percent to P16.70 billion in the third quarter.

The IC’s report was based on financial submissions of all 18 pre-need companies with either existing licenses or have pending renewal applications. The report excluded Caritas Financial Plans Inc., which was placed under conservatorship last July.

READ: Pre-need sales down 58.6% amid pandemic-induced recession

According to IC, the industry increased their surplus in trust funds to pay benefit claims under all the pre-need plans they sold.

Financial results showed investment in trust funds amounted to P124.23 billion so far. Of that amount, companies set aside P119.14 billion as reserves for benefit payments. That yielded a surplus in trust funds of P5.09 billion, which was 380 percent higher than a year ago.

READ: 51.7M Filipinos covered by micro-insurance as of Q1 2023, IC says

Lastly, total net worth of the industry in the third quarter jumped 42.53 percent to P21.65 billion on the back of 9.76 percent annual growth in total assets to P147.86 billion.