What about the great start of life insurance this year, the impact of the war in Ukraine? , News / Analysis Savings

Investing in life insurance made a breakthrough in 2021. For the first time since April 2019, net inflows from these contracts (deposits minus withdrawals) exceeded € 3 billion in January.

This inflow, which increased by 300 million euros compared to December, was mainly based on unit-link units and emitted a net amount of 3.8 billion euros, while euro-denominated funds decreased a net amount of 800 million euros. Was recorded.

Therefore, all life insurance contributions for the first four weeks of 2022 amounted to € 13.8 billion (+ € 300 million compared to January 2021) and the total amount of outstanding life insurance policies at the end of January was € 1.871 billion. It increased by 4.3% from one. Year.

January, characterized by the transmission of annual performance of contracts and the payment of some tax credits, encouraged high savings directed at inherently dangerous vehicles.

Good performance of PER

Post-retirement investment was also a major factor in the increase in inflows. Contributions paid to the Retirement Savings Plan (PER) increased 72% year-on-year to € 568 million and net inflows € 461 million.

France Assureurs (formerly French Insurance Federation) reports that during this period 70,000 people took out new plans with insurance companies and 99,000 savers also transferred their old contracts to PER (1,72100 in a month). 10,000 euros were paid).

In total, as of the end of January 2022, 2.8 million policyholders had an unpaid PER of € 31.2 billion through insurance companies.

Given the new geopolitical situation, it is still unclear how life insurance will pass the rest of the year … last Sunday, government spokesman Gabriel Attal and last night, President of the Republic. Has already warned in a speech in French that Russia’s invasion of Ukraine will have some impact on national growth and households.

France’s already weakened purchasing power will decline further as inflation soars and prices of oil, other raw materials and agricultural products soar. The fear of an unprecedented expansion of conflict in Europe since the end of World War II does not mean that it does not affect the level of confidence in households and ultimately their savings reflex.

Insurance company exposure limited to Russian assets

A week after Russia’s invasion of Ukraine began, the French insurance sector has already imposed sanctions, and the asset freeze decided at the European Union, US and UK levels is the managing director of France. Guarantor to guarantee to Frankle Barois.

“” The impact of this crisis on insurance companies is limited. French insurers’ exposure to Russian and Ukrainian assets remains very limited as they account for less than 0.03% of total investment. “, He specifies.

The impact on life insurance collection is difficult to predict for the time being. “” Geopolitical conditions can affect the economy as a whole and cannot be completely measured. “ Frank Le Barois said, ” Life insurance for French savers represents a buffer against the various potential consequences of a crisis.

According to France Assureurs figures, long-term investments – average 12 years – life insurance has the advantage of providing a variety of more or less risky support and can show resilience during times of economic turmoil.

But she is unaffected by the setbacks in the midst of a storm. These contracts, which currently have 18 million French, were hit by a health crisis in 2020. With ” Confinement that may have prevented the insurer’s commercial network from functioning properly. “It was suffering from an unprecedented outflow of € 6.5 billion.

With the recovery last year, the life insurance turmoil seemed to be a closed chapter until a few weeks ago. It seemed certain about the continued growth of unit-linked units, which are more profitable than euro-denominated funds but are not guaranteed capital. Already several years ago, the decline in public debt yields has been UC. Increasingly, insurers are directing commercial offers to these investments, which provide them with new sources of growth and better performance for policyholders.

From one crisis to another

The health crisis, which pushed down the central bank’s key interest rates, also highlights this trend. However, 2022 (hence another indication of crisis) could at least temporarily stop the growth of UC.

Asked about the outlook for policyholder asset allocation in the coming months, Frank Le Barois admits that it’s difficult to predict for the foreseeable future. “” Policyholders should look to the long-term outlook, not the short-term volatility, in line with the average duration of life insurance policies. “, He recalls. Whenever possible, hunt down despite the resurgence of risk aversion in financial markets.

Conflicts do affect the level and direction of household savings, but we are convinced that they are wiser in the context of war, volatility and market declines …

Needless to say, a gradual normalization of central bank monetary policy (although it may be slower than expected) will help bond rates recover and maintain euro-denominated funds last year. It is destined to improve performance in comparison. What makes them more attractive in recent years …