Life insurance confirms its dynamics under the eyebrow of the regulator

Life insurance is good, better in any case than savings on passbooks. In April, net collections reached 2.2 billion euros, up from April 2021. “From the beginning of the year, ensuring and maintaining the dynamics of development, despite the economic uncertainties”, congratulates Franck Le Vallois, General Manager of France Assureurs, who compiles this data every month. This dynamic is mainly fueled by retirement savings plans (PERs), which have cost almost 600,000 additional policyholders since January. By the end of April, some 3.2 million people are now becoming PER for a rate of 39 billion euros.

As in previous months, net inflows in April were driven by unit contracts, whose capital is not guaranteed (3.1 billion), while euro funds with a continuous guaranteed capital decollect, amounting to 900 million. In total, in the first four months of the year, the gross collection (contributions) on life insurance is close to 55 billion euros, its highest level for this period since 2010. And the net collection finds a little since 2011 of 10.5 billion euros.

Revenue increased by 1.1% year-on-year to € 1,847 billion, which strengthens the French people’s preferred financial investment position. Les assureurs like to detail their placements to emphasize their role in financing the economy. Thus, at the end of March, le capital investissement represents a rate of 30 billion euros and 47 billion are invested in assets related to infrastructure. Finally, sustainable finance now weighs 215 billion euros (11% of the total).

In the face of the opacity of the commissions, the issue of transparency

Behind these good numbers, life insurance is also in order to ensure better transparency of commissions, especially on units of account that compile several types of commissions. From 1 June, insurers are now in place to draw up a summary table of the main costs of each PER contract. And from July 1, they will have to do the same on the units of account. « It is a commitment made by the profession “, the Franck Le Vallois recall. And he is held. “Well, at least I didn’t go down without explaining myself first.” says the leader of France Assureurs.

Last year, a report from the Financial Services Advisory Committee (CFSF) highlighted the opacity of commissions charged at various levels, some of which in retrospective commissions are supposed to remunerate the work of the advisor. This work is made all the more indispensable as life insurance contracts become more and more complex to seize with the rise of units of account (39% of gross collection in April).

This duty of advice is, moreover, an obligation closely monitored by the regulator. Bercy also pointed to “excessive” fees for PERs last year. According to a study conducted in the latest firm, Fact & Figures, the implementation of costs on units of account is an annual fee for insurance includes between 2.5% and 3%.

Consultation of professionals during the summer

The subject is delicate. On the one hand, the commissions affect the performance of the contracts without the insured being fully aware of them. A growing challenge at a time when inflation is reaching historic highs and market performance is insufficient to mask the bill as in previous years. On the other hand, the nature of the contracts must ensure the remuneration of the insurers, the various media and the distribution networks.

“Distribution deserves fair pay,” François Villeroy de Galhau, governor of the Banque de France, acknowledged during the presentation of the annual report of the Autorité de control prudentiel et de résolution (ACPR) last Tuesday. But according to the latter, “Who says just says open, and who says naked technique doesn’t mean opaque”. In essence, even if he does not have to decide on trade policy, the governor believes that transparency is a prerequisite for lowering commissions.

The regulator does not intend to stop in such a good way. The ACPR has conducted an in-depth study on life insurance in different settings, such as commissions, yields or the nature of supports. The results of this ant work «Caller to more simplicity in the offer and a reflection to lead to the distribution of remuneration»François Villeroy de Galhau points out.

Clearly, these results will be discussed with life insurance professionals during the summer, before being published in the fall. With, at the forefront, new recommendations that complement the measures already put in place, “To enlighten savers”.

“Our goal”confirms Jean-Paul Faugère, Vice-President of the ACPR, in charge of insurance, “It’s good to make sure the customer’s interest always comes first.” »