In the third quarter of 2023, pre-need companies in the Philippines reported a significant increase in their financial performance, according to the latest data from the Insurance Commission.
Total premium income reached ₱16.70 billion ($299.93 million), marking an 8.28% rise from the ₱15.43 billion ($277.12 million) recorded in the same period last year. This growth was attributed to the heightened sale of pre-need plans, with approximately 600,000 plans sold in the first three quarters of the year, a 12.83% increase compared to the same period in 2022. The majority of these plans were memorial plans.
In a notable turnaround, the pre-need industry reported a net income of ₱1.79 billion ($32.15 million), recovering from a net loss of ₱7.11 billion ($127.70 million) during the same period in the previous year. This loss was primarily due to substantial benefit payments for pre-need policies.
The industry also demonstrated increased capacity to manage benefit claims. Investment in trust funds by pre-need companies amounted to ₱124,232.20 billion ($2.23 billion), while pre-need reserves, set aside for benefit payments and benefits already payable, stood at ₱119,136.30 billion ($2.14 billion). This resulted in a trust fund surplus of ₱5.09 billion ($91.42 million), a substantial 380% increase from the previous year's third quarter.
|
Investments in Trust Funds |
Pre-Need Reserves |
Surplus/Deficit |
|---|---|---|
|
₱124,232.2 million |
₱119,136.3 million |
₱5,095.9 million |
Financial stability indicators also showed positive trends, with the total net worth of the pre-need industry reaching ₱21.65 billion ($388.83 million), a 42.53% increase from the same quarter in the previous year. Twelve pre-need companies reported net worth increases, with one company's net worth surging by 2,000%.
This overall growth in the industry's financial health is further supported by a 9.76% increase in total assets, which amounted to ₱147.86 billion ($2.66 billion). Four pre-need companies alone reported at least a 10% growth in total assets. The comparative figures for total assets, liabilities, and net worth are presented below:
|
Q3 2023 (₱ million) |
Q3 2022 (₱ million) |
% Increase/Decrease |
|---|---|---|
|
Total Assets: 147,859.8 |
134,713.80 |
9.76% |
|
Total Liabilities: 126,208.1 |
119,523.10 |
5.59% |
|
Total Net Worth: 21,651.7 |
15,190.70 |
42.53% |
The Insurance Commission based these figures on financial submissions from 18 pre-need companies, including those with existing licenses or pending renewal applications. The exception is Caritas Financial Plans, Inc., which was placed under conservatorship in July 2023.
In other news in the country, data presented at the International Oil Pollution Compensation Funds’ (IOPC Funds) November meeting revealed that compensation claims have been made for a Philippine tanker sinking of ₱1.4 billion ($25.3 million), $26.4 million, and €2.7 million ($2.9 million), so far.
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