Life Insurance Net Inflows In France

Life Insurance News : Net new contracts of life insurance in France was divided by seven in 2011 to 7.6 billion euros, against 51.1 billion in 2010. 

The total premiums fell 9% last year to 189.6 billion, an amount that is very important in terms of flow.This is by far the largest investment in France long life insurance is the first product of the French savings with an outstanding volume of more than 1.3 trillion euros of the French was known in 2011 an economic and financial unprecedented.

An unprecedented context for this product long-term savings

Life insurance has had to deal with sovereign debt crisis that forced insurers to seek the highest-quality and therefore less profitable and the decline in stock exchanges in the second half penalty which also yields .

The funds affected by the euro sovereign debt crisis

German government bonds to 10 years are less than 2.5 point and 3.2 points in French titles which is unprecedented.

Companies of life insurance reduced their exposure to government securities in the countries of southern Europe and tried to diversify

Insurers have been provisioned losses on securities Greek for 60% of their value.

The shares have not been able to play their role of dopant

The shares fell 18% in 2011 in the euro area and Japan. In Italy, the fall was 27% and 17% in France. The shares were down 6% in the UK but also in China 19%, 11% Korea 26% in Brazil and 14% in Mexico. Only the United States have benefited from an increase of 5% of Dow Jones in 2011.

After the return to growth in 2010, investors did not bet on a turnaround as pronounced in 2011. Net growth stopped after the second quarter with a very negative expectations. Economic factors such as the earthquake in Japan and rising oil prices also contributed to slow growth. The second part of the year was dominated by the crisis in the euro area.

Banks that after developing their life Insurance subsidiary in the last twenty years have given their liquidity problems, encouraged their customers to place their availability on passbook accounts which are carried on bank balance sheets.

The highly competitive real estate financial investments

The French continued to invest in stone in 2011 as part of their primary residence or as rental investment in spite of the high value of real estate.

The property has captured some of the savings allocated to investments long before. Due to the repayment of loans, it decreases the portion of income devoted to financial investments. Finally, with the credit crunch, households have had to increase the amount of their personal contributions which resulted in redemptions of long products such as life insurance.

Life insurance is a mature product

The double-digit growth of life insurance could not continue indefinitely.

Life insurance has captured much of the savings flows, but also benefited from transfers from other products with a housing savings scheme (due to a change in the tax system).

The end of translocations explains the smaller increase in life insurance.

In addition, a majority of contracts of life insurance and 64% of the outstanding have over 8 years. The outputs are made with lower taxation under the law, outings encouraged by rumors for years that a tightening of the tax system is to be expected.

Life insurance is the key tool of long-term savings

France has few tools for long-term savings. With the crisis in the financing bank, it is important to maintain funding for the long term especially with the crisis of public debt, the savings market is refocusing country by country. States should be less outside financing. Companies will, moreover, sought their resources more on the bond markets as with banks.