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Louise Maureen Simeon - The Philippine Star
March 3, 2025 | 12:00am
MANILA, Philippines — The lower disposable income of Filipinos diminished the demand for memorial plans last year, hitting its lowest sales in three years, as prices of essential goods remain elevated.
Data from the Insurance Commission (IC) showed that life or memorial plans sold in 2024 slipped by 6.67 percent to 698,791 compared to 748,766 the year prior. Life plans make up 99 percent of pre-need plan contracts.
This was also the lowest sales recorded since the 563,186 in 2021.
A memorial plan is a form of pre-need contract that pays for funeral and burial expenses.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the decline can be attributed to elevated costs of basic goods and services that effectively slashed Filipino households’ disposable income.
“Even with slower inflation, basic commodities are still expensive. There’s less money left after essentials such as for memorial plans,” Ricafort said.
“Also, there’s no more COVID, the concerns of Filipinos about death has decreased and so has the demand for life plans.”
The reduced demand was also evident in the pre-need industry’s net income, which more than doubled to P5.15 billion last year.
However, IC chief Reynaldo Regalado said this was driven by earnings from investments in trust funds which grew by almost 10 percent to P139.65 billion.
The industry’s total premium income slightly dipped by 0.38 percent to P22.64 billion as only eight out of 17 pre-need firms have reported high premiums collected. Premiums are being paid for every insurance policy.
St. Peter Life Plan Inc. sold the most number of life plans at 686,324 but this was seven percent lower than the 736,726 sold in 2023. The contract price also declined by three percent to P39.21 billion.
It recorded the largest net worth of P21.15 billion and is still the most profitable with P5.5 billion in net income.
Cosmopolitan Climbs Life Plan Inc. came in second in terms of life plans sold at 4,617 worth P234.25 million.
Diamond Memorial Care Plans Inc. issued 4,024 plans worth P179.45 million and PhilPlans First Inc. signed off 2,572 valued at P407.73 million.
Seven of the 17 firms which disclosed their financial status incurred a net loss last year. These are PhilPlans First Inc. (P546.82 million), AMA Plans Inc. (P10.26 million), Diamond Memorial Care Plans Inc. (P2.46 million), Mercantile Care Plans Inc. (P2.05 million), Freedom Life Plan Corp. (P1.97 million), GoodLife Plans Inc. (P780,000) and Evergreen Life Plan Services Inc. (P130,000).
IC data showed that pre-need reserves went up 6.1 percent to P129.79 billion. As mandated by the Pre-need Code, providers must keep a reserve to cover benefit payables.
Following the increases, the industry saw its asset base improve by 5.89 percent to P164.71 billion while liabilities also rose by six percent to P136.73 billion.
Similarly, total net worth climbed by 20.5 percent to P27.98 billion, mainly due to the 38 percent rise in retained earnings.
