Pre-need industry sales plunge 18.2% to P2.3B in January

The pre-need industry had a bad start this year with sales falling by 18.2 percent in January as the public decided to adopt a wait-and-see stance before they make their investments decisions.

Based on the report prepared by the Securities and Exchange Commission’s (SEC) Non-Traditional Securities Department, sales of the pre-need sector declined to P2.3 billion in January this year from P2.81 billion a year ago.

The number of plans sold dropped 7.84 percent to 35,513 from 38,534.

Bulk of total sales, or P894.92 million, came from pension plans with Philam Plans Inc. contributing P187.51 million. In terms of the number of pension plans sold, Mercantile Plans Inc. led the list with a total of 2,208 units sold for an aggregate value of P16.73 million.

Sales of pension plans slid by 45.7 percent from P1.65 billion. Total pension plans sold likewise decreased to 12,844, down 40.35 percent from 21,531 a year earlier.

The number of education plans sold likewise went down by 32 percent to 6,847 from 10,022. As a result, the value of their sales decreased 20 percent to P777.52 million from P971.16 million.

However, the number of life plans sold jumped by 127 percent to 15,822 from only 6,981. The value of these plans amounted to P629.04 million or more than three times the year ago’s P194.33 million.

Initial collections from these plans reached P264.87 million, 15 percent lower than the previous year’s P311.35 million.

Philam Plans Inc. led the list of education plan issuers with sales of P325.65 million, accounting for 2,523 units. Far second was Berkley International Plans Inc. with a total of 1,328 units sold valued at P152.23 million followed by Prudentialife Plans with a total of 520 units sold valued at P79.52 million.

The Alba-owned Prudentialife Plans, however, was the top seller of life plans with a total of 8,544 units valued at P379.47 million followed by St. Peter Life Plans with sales of P121.94 million for 4,040 units.

SEC officials, however, expect the industry to bounce back in the coming months due to improving economic prospects.

The pre-need industry caters to clients who resort to pre-need plans as saving mechanisms to answer future needs of either themselves or their beneficiaries.

The plans provide for the educational costs of their children; their pension upon retirement; and memorial service upon their demise.