Pre-need firms’ sales down 22.5% in first seven months

Reflecting poor economic conditions, sales of pre-need companies fell 22.5 percent in the first seven months of the year to P18.59 billion from P24 billion the same period last year.

Based on a report from the Securities and Exchange Commission (SEC) the number of units sold for the period January to July this year went down by 14.4 percent to 311,699 from 364,081 the previous level.

The decline was attributed to the current difficult environment, the unstable foreign-exchange rates, and uncertainties in the political front.

Pension plans accounted for bulk of the total sales with 153,675 units sold or 28 percent lower than the year ago’s 213,521 units. The value of these plans amounted to P9.25 billion, a decline of 37.59 percent from the previous year’s P14.82 billion.

The number of education plans sold also decreased to 90,055 or 19.8 percent lower than the year earlier figure of 112,290. The contract price of these units dropped by six percent to P7.57 billion from P8.07 billion.

The number of life plans sold, on the other hand, rose 77.6 percent to 67,969 from 38,270 last year. The value of these plans amounted to P1.77 billion or an increase of 60 percent from the previous level of P1.1 billion.

College Assurance Plans Inc. once again dominated the sales of education plans with a total of 26,166 units sold to the public valued at P1.41 billion. In terms of sales, however, Prudentialife Plans Inc. led the list with sales of P1.29 billion or a total of 15,830 units.

Among issuers of life plans, Prudentialife Plans Inc. led the pack with P435.57 million in sales (14,911 units), followed by St. Peter Life Plans Inc. which sold 13,231 units to the public valued at P36.35 million.

Mercantile Plans Inc., on the other hand, topped the list of pension plan issuers with sales of P165.56 million, accounting for 26,806 units sold to the public. Comprehensive Annuity Plans and Pension Corp. came in next with 23,023 units sold valued at P1.06 billion. In terms of sales, however, Philam Plans was the top moneymaker with sales of P2.35 billion

For its initial collection this year, the pre-need industry reported a decline of 16.16 percent to P1.93 billion from P2.3 billion the same period in 2002.

Preneed companies are firms issuing plans to provide payment or performance of future services or monetary considerations at the time of actual need. Preneed plans include life, education and pension plans.