PhilPlans posts 12% hike in 1st payments

MANILA, Philippines - PhilPlans First Inc., the largest pre-need company in the country, has reported first payments (FP) worth P130 million in the first six months of 2013, up 12 percent from P114 million in the same period last year.

First payments (FP) are the initial payments for five-year or 10-year 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.

FPs are critical for pre-need companies as these translate to fodder or additional investments for its 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.

It is the real gauge of how the pre-need company performed in a given year, similar again to FYPs (or new business) in the case of life insurers.

The total plan value or contract price for the pre-need industry does not reflect the real collections or payments made, just the value of the plans acquired.

Meanwhile, newly-installed PhilPlans president and chief executive officer Annette Wassmer Tirol said that first half of 2013 was “a good one” on the back of robust sales, renewals and investments.

She said PhilPlans sees more opportunities for growth due to the positive macro economic climate and competitive landscape.

The pre-need firm is primarily focused on forging strategic alliances such as other educational, health and medical, and memorial institutions.

At the end of June 2013, PhilPlans’ trust fund reached over P40 billion.

Trust funds are the reserves for future claims of the plan holders. BDO Unibank Inc. (BDO), Deutsche Bank, the Bank of the Philippine Islands (BPI), the Metropolitan Bank & Trust Co. (Metrobank), Union Bank of the Philippines (UnionBank), East West Banking Corp. (EastWest Bank), Maybank ATR KE Financial, and Maybank Philippines Inc. are the trustee banks tapped to manage the trust fund.

As of the first six months, PhilPlans’ net income stood at P1.729 billion, already surpassing the full-year total of P1.625 billion in 2012.