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Life insurance: the average rate of funds in euros rises to 2%, according to the ACPR

According to the Prudential Control and Resolution Authority, the average rate paid by life insurance funds in euros has reached a level not seen since 2015.

The average rate covered by 2022 by life insurance funds in euros averages 2%, the first since 2015, the Prudential Resolution and Control Authority (ACPR) estimated on Monday in a study. “After many consecutive years of decline, the increase in rates (…) has led insurers to increase the performance served to their customers,” says the police officer for insurers and banks, backed by the Banque de France . We have to go back to 2015 to find a higher average, of 2.27%, according to the same source.

Since the beginning of the year, each insurer has revealed its rate for 2022. The Afer savers association, which generally acts as a barometer for the rest of the profession, is, for example, in the average, with 2.01%. This average rate, estimated at 2%, is however significantly lower than that of Livret A, the reference regulated savings product, set at 3% since February 1. All the more so since it is subject to social security contributions currently set at 17.2%, unlike the Livret A.

ECB rate hikes ‘will only taper off gradually’

However, the profitability of all these savings products is lower than inflation, around 6% in France. The ACPR also notes that insurers have used their reserves, the Profit Sharing Provisions (PPBs) built up during the rate-drop period, to increase their rates this year. It also warns that the rate hikes decided in recent months by the central banks, in particular the European Central Bank (ECB), will only gradually affect the assets of the insured.

“The long maturity of insurers’ portfolios, which had allowed them for years to offer a rate of return higher than the market, on the contrary, limits their ability to pass through the rise in interest rates as quickly as other products , as regulated brochures”, indicates the ACPR. Total life insurance balances stood at 1.871 billion euros at the end of January, or a good third of French savings, according to the latest available data from France Assureurs.

Some 18 million people have life insurance, which means an average capital of about 100,000 euros per subscriber, often invested in various contracts.

Author: LP with AFP
Source: BFM TV

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