HMOs turn profitable; preneed earnings double
The local health maintenance (HMO) industry swung to profitability last year while preneed firms saw their combined earnings more than double last year, latest data from the Insurance Commission (IC) showed.
In a statement, the IC said the HMO industry netted P979.8 million last year, a reversal from the P4.27 billion net loss in 2023.
Explaining the latest financial results of the sector, the regulator said total revenues jumped by 20.12 percent to P79.37 billion on the back of an 18.43-percent increase in membership fees collected.
That, in turn, translated to a 77.59-percent surge in membership fee reserves, while the claims reserves rose by 32.24 percent.
Such cash inflows surpassed the industry’s expenses that amounted to P61.05 billion, which were nevertheless up by 11.44 percent due to a 10.08-percent spike in health benefits and claims paid for sick members.
“We also noted from the submissions that the HMO sector’s total assets, total invested assets, total equity, total capital stock and total liabilities [increased] across the board during the quarter under review,” Insurance Commissioner Reynaldo Regalado said.
In a separate report, the IC said the aggregate net income of the preneed industry had increased by 2.5 times to P5.15 billion last year.
Regalado said the growth was mainly driven by the 68.04-percent spike in income earned from investments in trust funds.
Meanwhile, income from other sources surged by 120.23 percent in 2024.
That offset the 0.38-percent contraction in preneed firms’ total premium income, which settled at P22.64 billion.
At the same time, the number of preneed plans sold also declined by 6.61 percent.
The IC said life or memorial plans had remained the sector’s best-selling products, accounting for 99.88 percent of the total sales last year.
Overall, the sector’s total assets grew by 8.12 percent to P164.71 billion.
Investments in trust funds, which accounted for the bulk of industry assets, increased by 9.08 percent last year.
