THE PRE-NEED industry could expand in the coming months and reverse the loss it booked in the first quarter as fresh players are set to enter the market by yearend, the Insurance Commission (IC) said.
The insurance regulator said it continues to be bullish on the pre-need industry’s prospects after it booked a net loss in the first three months of the year as it is set to release licenses to the three new firms expected to enter the sector before the year ends.
“We remain optimistic that the pre-need industry’s performance will improve in the succeeding months. We are expecting that we will be able to issue licenses to operate to at least three new industry players within the year,” Insurance Commissioner Dennis B. Funa was quoted as saying in a statement e-mailed to reporters on Tuesday.
Preliminary data from the IC showed pre-need providers registered a net loss of P831.54 million in the January to March period compared to the profit of P314.95 million that it booked in the same period last year.
In contrast, the sector’s net premium income by end-March stood at P4.1 billion, an uptick of 6.10% from the P3.855 billion in the first quarter of 2016.
The Insurance Commissioner added that the agency is currently processing at the applications of two of the pre-need providers that are set to enter the sector.
“In fact, the two firms already submitted applications for licenses to sell pre-need plans. We are currently evaluating the applications of these two firms. Once we find everything in order, the necessary licenses will be issued in their favor,” Mr. Funa said.
He also noted that investments, competitiveness and innovation in services and products among pre-need providers would be boosted with the entry of these new firms.
“Therefore, the entry of new players is expected to raise investments in and competitiveness within the sector. This will also help drive innovation and further improvement in the services of pre-need firms as a way of attracting new customers,” the Insurance Commissioner said.
Republic Act No. 9829 or the Pre-Need Code of the Philippines states new pre-need providers must have a minimum paid-up capital of P100 million.
Total assets of the pre-need sector stood at P120.6 billion at end-March, a slight increase of 1.32% from P119 billion last year.
On a per company basis, PhilPlans Firs, Inc. booked the largest net loss at P1.12 billion in the first quarter. The eight other companies that also booked net losses during the period were AMA Plans Inc. (P5.24 million), Financial Freedom Future Planners (P60,000), Ayala Plans Inc. (P13.09 million), Manulife Financial Plans Inc. (P42.11 million), Sunlife Financial Plans (P8.48 million), Cocoplans Inc. (P8.94 million), Loyola Plans Consolidated Inc. (P10.04 million), and Trusteeship Plans Inc. (P260,000).
Meanwhile, 10 firms recorded profits during the first three quarter: Caritas Financial Plans (P1.22 million), Cityplans Inc. (P2.276 million,) First Union Plans, Inc. (P3.42 million,) Paz Memorial Services (P2.05 million,) St. Peter Life Plan, Inc. (P348.66 million,) Himlayang Pilipino Plans, Inc. (P8.05 million,) Mercantile Care Plans, Inc. (P330,000,) Provident Plans international Corp. (P4.64 million,) Transnational Plans, Inc. (P4.42 million) and Eternal Plans, Inc. (P1.24 million). — Janine Marie D. Soliman