PhilPlans net income jumps 77.8% in 2011

MANILA, Philippines - PhilPlans First Inc. (PhilPlans) has registered a consolidated net income of P1.6 billion in 2011, up 77.8 percent from the P900 million recorded in 2010.

PhilPlans is a wholly owned subsidiary of STI Investments Inc. and a member of the Philippine First Group.

PhilPlans president and chief executive officer Monico V. Jacob, however, refused to make a forecast on its consolidated net income target for 2012.” But we are looking at P400 million in first payments this year,” Jacob said.

First payments (FP) are the initial payments for the generally five-year payment period for pre-need products, which include pension, memorial/life and education. It can be compared to the first year premiums (FYP) in the case of the life insurance industry.

FP is critical for pre-need companies, as it translates to additional investments for their trust funds as well as operational expenses and agent commissions. Pre-need firms are required by law to extract 51 percent from FPs for its trust funds.

Trust funds basically comprise reserves and investments for maturing plans, which are held by trustee banks.

In 2011, PhilPlan’s FPs amounted to P257 million, higher by 38 percent from P186.9 million in 2010.

Trust funds stood at P36.7 billion as of end-October 2011, from P31.8 billion in the same period in 2010.

Last year, total new plans generated by the company reached 12,280, up 32 percent or by 3,022 plans, from 9,258 in 2010. PhilPlans has over 300,000 plan holders.

Of total plans, 52 percent is pension plans, 33 percent is educational plans, and the balance of 14 percent is life/memorial plans.

“We would like to aggressively grow our life plans for 2012,” Jacob stressed.

Last year, PhilPlans released benefits worth P2 billion broken down as P1.1 billion in pension benefits, P869 million in education benefits, and P14 million in life benefits.

PhilPlans was formerly known as Philam Plans, a subsidiary of PhilamLife. In October 2009, it was sold to the Philippine First Insurance and Systems Technology Institute Inc. (STI).

Prior to its sale, Philam Plans was already the largest pre-need firm in the country. Its sale to the STI group was due to financial problems of the American International Group (AIG), the principal of the PhilamLife group.