Life insurance remains popular with the French in July, but remains far from its pre-pandemic levels

The French still deposited more money than they withdrew in their life insurance in July, although the differential was reduced compared to 2021, to 800 million euros, according to data reported this Monday by France Assureurs, the federation of the sector.

In July 2021, net inflows amounted to 1.1 billion euros, or 300 million more than in July 2022. A “slight drop” in one year, notes Franck Le Vallois, managing director of France Insurers, but an increase of 600 million euros in June 2022.

Unit-linked units remain preferred over euro funds

Since the beginning of the year, life insurance has earned 12.9 billion euros net, or 1.4 billion more than in 2021 in the same period. In detail, in July the collection continued to be driven by “units of account” (UC), an investment method potentially more profitable than the traditional “funds in euros”, whose capital is guaranteed, but also more risky.

In July, the French favored units of account (2.5 billion euros in net inflows), while withdrawals of funds in euros exceeded investments by 1.7 billion euros. Funds in euros have seen their profitability melt in recent years, weighed down by the continuous fall in interest rates.

A product other than brochure A

In 2021, the average net return on social security contributions amounted to 0.89%, well below inflation, according to the Facts and Figures barometer. It could rise in 2022, but it will remain well below inflation, and it could also underperform the Livret A, whose rate of return was raised to 2% on August 1, “which will be the first time,” stressed the mr crevel

In particular, he cited the previous revaluation of the Livret A, which rose in February from 0.5% to 1%, which did not have a significant effect on life insurance. In contrast, the year 2020, marked by the explosion of the Covid-19 pandemic, had been a record year for Livret A, while life insurance had experienced historic disaffection.

In total, at the end of July, the outstanding balances of life insurance contracts reached 1,847 million euros, or “an almost stable level for a year”, according to France Assureurs.