Interest rates going up, insurers can invest the money placed by savers in more remunerative securities. What to sign the end of the restriction policy on these funds in guaranteed euros?
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Life insurance displays its solidity in the first four months of 2022, with net collection (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 account units, supports for which capital is not guaranteed, is maintained at a high level, 40 %.
Can this trend continue, when the financial markets have been falling since the start of the year? Historically, the appetite of savers for account units, partly invested in stock markets, is very linked to the performance of the CAC 40.
But the insurers have introduced safeguards. First of all by diversifying the supports offered in their contracts. “Unit of account does not necessarily mean equity fund, underlines Eric Rosenthal, Deputy Director General Savings and Financial Services of the Apicil group. The latter do not represent, for example, in our Gresham Banque Privée network, only 12 % of account units.”
Real estate media have developed strongly in recent years in life insurance: Civil real estate investment companies (SCPI), collective real estate investment organizations (OPCI) or Civil Real Estate Companies (SCI).
Better paid bonds
Insurers also count more and more on delegated management, entrusted to a professional, to retain the insured and avoid panic movements in the event of a stock market.
Another phenomenon has so far argued in favor of account units: the very low remuneration of funds in euros, for a few years. In 2021, the latter set up an average of 1.30 %, according to France Insurers (net of expenses but gross social security contributions and income tax). If 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 bond markets, where insurers make most of their investments, has changed it drastically in recent months. The interest rates to which the obligations issued by states and businesses have increased strongly, the debt to ten years of the French State has thus increased from remuneration close to zero at the end of 2021 to 1.50 % MI- May, according to the Banque de France.
This frank rates affects the funds in euros in life insurance, since almost 80 % of their outstandings are made up of bonds. Companies can now buy better paid titles, which helps increase the overall yield of their portfolio. “Since the beginning of 2022, we have been reinvesting on business bonds at a higher rate level in the average yield of our current portfolio on this segment,” said Guillaume Rosenwald, Managing Director of Macsf Epargne Retraite.
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