The earnings of the pre-need industry dropped almost 90 percent in 2022, with its bottom line falling below P500 million even amid an increase in number of life plan sold, the Insurance commission (IC) said.

Latest data from IC showed that net income of the industry reached P429.6 million last year, a huge 89 percent drop from P3.83 billion in 2021.

This came even as premium sold inched up by three percent to P21.18 billion as demand for life plans increased. The industry sold a total of 744,730 pre-need plans, 31 percent more than in 2021.

The bulk or 99 percent consisted of life plans, which also registered a 31 percent increase in number of plans sold.

The remaining 1,113 were pension plans, which dropped by 45 percent from the 2,054 sold the previous year. Education plans also slipped by 40 percent to 44.

Investments in trust funds also slightly declined by 1.24 percent to P119.21 billion while pre-need reserves only inched up by 1.05 percent to P113.75 billion.

As mandated under the Pre-Need code, Providers keep a reserve to cover benefit payables.

Meanwhile, the IC said the difference between investment in the trust funds and pre-need reserves declined by 33 percent to P5.46 billion from P8.14 billion in 2021.

Following the declines, the industry’s asset base was almost flat at P141.09 billion while liabilities inched up by 0.85 percent to P120.22 billion.

Similarly, total net worth went down by seven percent to P20.86 billion.

Latest pre-need figures covered a total of 17 firms, the same number in 2021. Of the total, 14 are licensed and three are servicing companies.

St. Peter Life Plan Inc. sold the most number of life plans at 729,891 with a contract price of P35.69 billion. It recorded the largest net worth of P13.85 billion, but only earned P207.54 million as of end-2022.

Cosmopolitan CLIMBS Life Plan Inc. came in second in terms of life plans sold at 8,291 worth P319.7 million.

Seven of the 17 companies that disclosed their financial status incurred a net loss last year.