Life insurance shows its strength in the first four months of 2022, with net inflows (deposits less withdrawals) of 10.5 billion euros – “highest level since 2011”, according to France insurers. Another reason for satisfaction for the profession: the share paid on units of account, supports for which the capital is not guaranteed, remains at a high level, 40%.
Can this trend continue, while the financial markets have been falling since the start of the year? Historically, savers’ appetite for units of account, partly invested in stock markets, is closely linked to the performance of the CAC 40.
But insurers have introduced safeguards. First of all by diversifying the media offered in their contracts. “Unit of account does not necessarily mean equity fundsunderlines Eric Rosenthal, deputy general manager savings and financial services of the Apicil group. The latter only represent, for example, in our Gresham private banking network, only 12% of units of account. »
Real estate supports have developed strongly in recent years in life insurance: civil real estate investment companies (SCPI), undertakings for collective investment in real estate (OPCI) or even civil real estate companies (SCI).
Better paid bonds
Insurers are also increasingly relying on delegated management, entrusted to a professional, to retain policyholders and avoid panic in the event of a stock market crash.
Another phenomenon has so far pleaded in favor of units of account: the very low remuneration of funds in euros, in recent years. In 2021, the latter amounted to an average of 1.30%, according to France Assureurs (net of costs but gross of social security contributions and income tax). While this level was stable compared to 2020, it did not cover inflation.
Can the situation change for the remuneration of funds in euros? What is certain is that the context on the bond markets, where insurers make the bulk of their investments, has changed drastically in recent months. The interest rates at which bonds issued by States and companies are remunerated have increased sharply, the ten-year debt of the French State has thus gone from a remuneration close to zero at the end of 2021 to 1.50% mid- May, according to the Banque de France.
This sharp rise in rates affects life insurance funds in euros, since nearly 80% of their outstandings are made up of bonds. Companies can now buy securities better remunerated, which contributes to increasing the overall return of their portfolio. “Since the beginning of 2022, we have been reinvesting in corporate bonds at a rate level above the average yield of our current portfolio in this segment”says Guillaume Rosenwald, Managing Director of MACSF Epargne Retraite.
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