Is it still interesting to take out life insurance?

“Only” 6.5 billion of net collection in 2020: hit hard by the restrictions of the health crisis, which has taken savers away from their financial advisors, life insurance has been one of its worst years in several years in 2020, as savers have withdrawn almost as much money as they have invested.

The “net” collection corresponds to the difference between the sums invested (116 billion euros in 2020, compared to 144 billion in 2019, according to the French Insurance Federation) and those that were withdrawn, either through “Redemptions”, ie following the death of the insured (€ 122 billion) in 2019 and 2020).

This result is not entirely surprising, as life insurance has lost its main attraction in recent years: its guaranteed euro funds. For thirty years, this sub-fund, sometimes described as “magical”, has made it possible to offer savers a solution that mixes performance, security and availability. This is no longer the case, as euro funds have been caught up in falling financial market rates, and their yields have been steadily declining, to the point where they can barely protect themselves from inflation.

Take risks

It’s not over: Major groups like Generali are already announcing a fall in revaluations for 2021 (the yield on one year is still known at the beginning of the following year, after the closing of the accounts of the insurer). A drop that could be particularly abrupt, since Generali’s executives mention a possible rate of 0.5%, but which may not be general, since companies such as the MACSF (Mutuelle d’assurance du corps sanitaire français) are hoping for a maintaining performance or even a slight increase in performance.

Explanation: The decrease in the amounts entrusted to him has prevented him from placing new bonds in his fund (debt securities issued by states and companies, only to enable insurers to guarantee the value of capital that they make fruitful) unprofitable at present.

Read also Does the retirement savings plan overshadow life insurance?

That’s not all their assets in full on this risk-free sub-fund.

Many companies now make access to this guaranteed fund conditional on a significant portion of payments being made in “unit of account” media. These investments, in direct contact with the financial or real estate markets, do not benefit from any protection, but they are less demanding on capital for insurance companies.

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