2021 record collection

French favorite financial investment finds a record collection in 2021 after the dark year of 2020 (€ 6.5 billion) as life insurance plunges into political debate on inheritance taxation .. ..

Net inflows amounted to € 23.7 billion, the lowest level since 2010, according to figures released by France Assureurs (formerly French Insurance Federation). Total inflows amounted to € 151.1 billion, nearly 39% of which was in account units (UA). These funds are primarily invested in equities, but unlike euro funds, their capital is not guaranteed.Low compensation, about 1% in 2021, euro funds continue to decline slowly, with an outflow of 11 billion euros..

At the end of the exercise

“Unit-based life insurance reaches levels that have not been reached for more than a year, both in contributions and net inflows.”Welcome the French guarantor in a press release. Everyone knows that insurers have long wanted to revert their life insurance collections to unit-linked funds to compensate for historically low interest rates and mitigate capital demand. Aggressive commercial policy that has contributed significantly to the continued rise in the market since Air Pocket in March 2020.

Stock markets are expected to become more volatile this year, and a (slow) rise in interest rates could change the situation in favor of euro funds... “We have probably reached the end of the exercise (Editor’s note to facilitate collection at UC)”Recently, I confessed to a major local insurance company. Life insurers do not want to “distort” their products and their capital guarantees too much, even though life insurance is increasingly focused on the highest net value.

For French guarantors, the health of this new life insurance is partly “Increased success” PER (Retirement Savings Plan). The collection of these products created by the Agreement Act is actually included in life insurance. The net inflow to PER reached 5.6 billion euros annually. That is, as of the end of 2021, the unpaid amount of € 29.6 billion insured by the insurance company.

As of the end of September 2021, insurers had a market share of 87%, excluding the transfer of old contracts (50% including the transfer). The advantage of PER for insurers is that the average percentage of CUs being collected is high, usually 40-60% (sometimes 100%), depending on the contract profile.

Outer Space Treaty

The strong resurgence of life insurance in French savings has led insurers, brokers and bankers to mobilize Bercy to sign market contracts aimed at increasing the transparency of life insurance and PER fees. Sometimes it happens. These “hidden costs”, especially with respect to UC, have been regularly criticized by recent reports by consumer organizations and the Financial Sector Advisory Board (CCSF).

According to an estimate by Facts & Figures, a specialized company conducted last spring, the total annual cost will be 2.5 to 3% when the cost of account units is added up. “The market surge has made it possible to hide the total billing amount for accounts linked to units, but this does not seem to be sustainable in the long run.” Cyrille Charter-Kastler, President of Facts & Figures, has concluded.

The market agreement stipulates that from June 1st, experts will provide internet access to the details of the fees levied on the summary table. “This allows us to make choices with complete transparency.”Guaranteed the Minister of Economy, Bruno Le Mer.

Support PER

In line with last year’s CCSF recommendations, starting next July, the information will relate not only to both the total contract fee and the administration fee, but also to the administration fee that accompanies each medium.

While the government is hoping for this product to solve some of the pension equations and create a “French pension fund” that is likely to be long, the beginning of a debate over the overage of a particular PER. I wanted to bite-a term investor in the economy.

However, this transparency risks rekindling price competition, even if the product becomes more complex, often requires the advice of a distributor, and is often paid for by retro commissions.