Life insurance has been recovering since the beginning of the year. After a mixed 2023, the French are saving again on their contracts: over the first seven months of 2024, the net collection of withdrawals amounts to 17.9 billion euros, a figure already well above that of the whole of 2023.
This craze mainly benefits the units of account, the unsecured financial vehicles referenced in this envelope. The euro fund, however, remains shunned. Even if the outflows of money are less than in the past (between 2020 and 2022), nearly 5 billion euros have left the general assets of the companies since January.
However, the latter has seen its yield increase sharply over the past two years to reach an average of 2.60% in 2023 in individual contracts, according to the Prudential Supervision and Resolution Authority, the banking and insurance watchdog. Cyrille Chartier-Kastler, the founder of the Facts & Figures firm, estimates in his latest Individual Life Savings barometer that in the space of two years, banking groups have raised the average rates served by an average of 171 cents, going from 0.79% in 2021 to 1.78% in 2022 and then 2.50% in 2023.
An encouraging trend, but not sustainable
The trend is encouraging but it may not be sustainable. Indeed, these increases have been largely fueled by reserves, set aside in previous years. Thus, the ACPR informs us that the return on assets generated by companies last year (before recourse or setting aside) is only 2.20%. “Despite the rise in interest rates since 2022, the recurring portion of the rate of return on insurers’ assets has continued to decline, particularly due to the replacement of old high-yield bonds by lower-yielding bonds,” indicate the authors of the report. Indeed, the securities maturing are not yet those acquired when rates were lowest but before. Insurers have therefore boosted their rates by dipping into their reserves, the total amount of which eroded last year.
Furthermore, competition should prove less tough next year on guaranteed products such as savings accounts. All these elements argue more for a status quo than a continued revaluation of euro funds. Facts & Figures thus anticipates an average rate of between 2.50% and 2.60% on euro funds in 2024. However, from one company to another, commercial practices could vary greatly. Those with solid reserves and the desire to conquer market share could be more aggressive.