Life insurance attracts… but at a much more timid pace than Livret A

Savers deposited in February 1.1 billion euros more than they withdrew on their life insurance contracts, said Wednesday France Assureurs, a sum in line with previous months but much lower than that of the Livret A over the period.

Life insurance continues to develop (…) in line with the pace of development for the year 2022, underlined the general manager of the professional federation Franck Le Vallois during a conference call.

And in line with January when life insurance contracts had swelled by 1.2 billion euros. All contributions, i.e. the sums paid on contracts, totaled 13 billion euros in February, a record since 2010 for the second month of the year, while benefits (which include redemptions and payments in the event of death) amounted to 11.9 billion euros.

The detail of the vehicles is contrasted: funds in euros suffered a decline in their assets of 1.7 billion euros while investments in units of account (UA), potentially more profitable but also more risky, recorded a net inflow of 2.8 billion euros.

1874 billion euros, or a good third of French savings

Total life insurance outstandings were stable over one year, at 1,874 billion euros, or a good third of French savings.

At the same time, the Livrets A and the Livrets de développement durable et solidaire (LDDS) were full: they swelled by more than 8 billion euros in February, according to the Caisse des depots.

Their yields are better: 3% net of tax for these two products, against 2% on average for euro life insurance funds, according to calculations by the Prudential Control and Resolution Authority (ACPR), not to mention taxation. Life insurance is increasingly competing with regulated savings accounts, reacted Philippe Crevel, from the Cercle de l’Epargne.

No risk in life insurance for savers

Like bankers and asset managers, insurers have had to manage for several months the critical moment of a rise in key central bank rates. While this policy, which is primarily intended to counter inflation, allows them to invest in new, more profitable bonds, it reduces the market value of their older bonds, which have become difficult to resell if necessary.

There is no risk in life insurance for savers, AFP Franck Le Vallois pointed out on Tuesday, adding that he was not aware of insurers in difficulty in France. Life insurance is experiencing no difficulties, there is no mass exit or dislike of the French for this product, he added on Wednesday.

Life insurance: no risk for savers despite the banking crisis