Pre-need industry bullish despite economic slowdown

Top leaders of the pre-need industry are confident that the impressive performance of the industry will continue this year despite the current slump in the economy.

According to Francisco Colayco, board member of the Federation of Pre-Need Plans Companies Inc. (PFPPCI) and president of TPG Corporation (formerly The Professional Group), the substantial growth in sales registered by the industry last year only proves that industry can grow over a period of worst economic scenario.

The industry’s sales figures last year grew by 19.18 percent compared to 1999. Actuarial Advisers, Inc. (AAI), a consultancy and audit firm, considered the increase in sales significant, since the industry posted only a modest 8.96-percent growth in 1999 and 5.65 percent in 1998.

AAI data present an impressive industry landscape, with total sales of over P14.7 billion, profits of P698.1 million, assets of P123.5 billion and net worth of 7.7 billion. Pre-need trust funds held by the banking industry at the end of 2000 amounted to P31.4 billion, 21.37 percent higher than the 1999 level of P25.9 billion.

AAI figures also show consistent upward trend in sales from 1997 to 2000, with annual growth rate computed at 22.18 percent. This figure was surpassed by 11 companies, among them Philam Plans, TPG, and Prudentialife. Significant market share gainers during these years include Philam Plans with 6.56 percent, TPG with 4.58 percent and Prudentialife with 1.57 percent. High surges in market positions were recorded by Berkley International, up from number 26 position to number nine, and TPG, up from number 13 to number five.

Colayco believes that the upward trend in sales will continue, as more and more people realize the necessity of availing pre-need plans, especially during times of great uncertainties. "Based on SEC records, TPG Corp. has posted sales amounting to P1.45 billion during the first three quarters of this year up by 42 percent compared to the same period last year. It also indicates that we have already surpassed our total sales of P1.36 billion last year by seven percent. So I don’t see any reason why TPG will not be able to perform well this year," Colayco said.

The ISO 9002 certified TPG Corporation, one of the leading pre-need companies in the country, registered an outstanding 31-percent increase in sales last year as against the 19.18- percent growth registered by the industry, posting a phenomenal 30-percent growth rate annually since 1997.