Improvements and Challenges in Bank Marketed Life Insurance Contracts

SOften criticized because of their fees, their limited fund ranges and their low return, life insurance contracts marketed by banks have nevertheless tended to fade in recent years.

Under the pressure of competition, certain networks have opened their contracts to funds from external management companies. They have also broadened their scope to new asset classes, such as private equity., securities not listed on the stock exchange. And relaxed their contracts. Good news, insofar as these banking contracts represent two-thirds of the market, due to a captive and less observant clientele.

Another positive point: bancassurance companies are starting to draw on their abundant reserves to be able to post better returns. Thus, Predica, the insurer of Crédit Agricole and LCL, increased at the beginning of 2023 (for the year 2022, therefore) the average rate of its fund in euros by 1.25 points on its Predissime 9 series general public contract. 2. At Crédit Mutuel and CIC, customers who took out a Life Insurance Plan contract benefited from a rate increasing by 1 point over one year.

At BNP Paribas, the flagship contract, BNP Paribas Multiplacements 2, provided an equally solid return for 2022, which ranges from 2% to 2.95%, depending on the share of units of account in the portfolio. Finally, Séquoia, one of Société Générale’s contracts, paid between 1.60% and 2.96%, rates increasing by 0.89 points on average over one year.

Online banks above the fray

But be careful, this observation is not valid everywhere. Nor for all customers. How to distinguish the wheat from the chaff? Don’t trust your advisor with your eyes closed. You have to take things by the menu and study each contract in the light of precise criteria: fees (on payment, management and arbitration), the profitability of the fund in euros (rely on the past to understand the policy of the insurer) and the financial offer (the diversity of units of account offered).

This work should lead you to two general conclusions. First of all, wealth contracts, which require a higher amount of savings to open than traditional contracts, are generally better. A few thousand euros are sometimes enough to access it: ask for them!

Then, old life insurance policies, when they are no longer marketed, are very often mistreated. They no longer evolve and insurers reserve their best returns for more recent contracts. Favor networks that maintain their contracts over time, rather than those that constantly create new products.

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