Life Insurance Yield Season 2022 Looks To Be Exciting! If, with the market decline, the unit-linked quotas that have enjoyed increasing success in recent years mostly show declining trends, euro funds could hold some good surprises.
Every year, in the January-February period, the insurance companies communicate the remuneration served on these funds, which are appreciated by those seeking security above all. After years of decline, the trend may finally be reversed. “We have hit a low point for euro funds”believes Thomas Delannoy, deputy general manager of ASAC-Fapes [une association d’épargnants indépendante].
If the 2022 returns have not yet been decided in companies, there are already those who have made a change of gear. “We will increase the fees paid to members to help them preserve their purchasing power in an environment of inflation, but in the long run the best defense is diversification.”says François-Régis Bernicot, CEO of Suravenir.
However, it remains difficult to know whether all companies will adopt the same course of action. How come ? “Insurers advance on a crest line”, notes Cyrille Chartier-Kastler, founder of the Good Value for Money website. The context has, in fact, drastically changed on the financial markets.
Interest rates have been falling for years, leading to a decline in the return on the general assets of insurers, 80% of which is made up of bonds (debt securities) and which serves as the basis for the return on funds in euros. Each new euro invested in recent years has therefore altered the fund’s performance in euro. Insurers have therefore taken drastic measures to limit access, in favor of units of account, to unsecured capital supports, largely invested in the stock exchange.
“A paradigm shift”
However, since the beginning of the year, the opposite phenomenon has occurred: rates are just going up. “Although the French state had been in debt for over ten years roughly 0% at the end of 2021, it must now offer a return of 2.60% to its creditors (at the end of September), says François-Régis Bernicot. It’s a paradigm shift! “ This is a rather favorable development for insurers. “The rise in interest rates brings investment opportunities in better-remunerated securities than in recent years”esteems Odile Ezerzer, director of Macif Finance Epargne and general manager of Mutavie.
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