Life insurance accelerates on unit-linked

In an attempt to offset inflation, managers are investing record amounts in these risky assets


In the uncertain macroeconomic environment, life insurance is undoubtedly the preferred financial product for French savers. Indeed, despite a slight slowdown observed since the beginning of last summer, the collection of funds allocated to this type of investment should record a level this year comparable to, if not higher than, that of 2021, around 150 Billions of Euro’s. Note, however, an important difference: for several months, the share of sums invested in unit-linked contracts has continued to grow to the detriment of traditional bond funds in euros.

The most probable explanation in this period of sharp rise in prices: the hope of preserving purchasing power thanks to a higher return on the sums invested. This is confirmed by the survey carried out last June by Ifop on behalf of the online brokerage platform Altaprofits, according to which the French consider investment in units of account as the second “safe haven” against the inflation, behind real estate but ahead of gold and stock markets.

“For several months, the share of sums invested in unit-linked contracts has been steadily increasing to the detriment of bond funds in euros”

Traditional funds in euros have been the heart of life insurance for many years and today still represent nearly 80% of total assets. But they are starting to lose a good part of their attractiveness. Gone are the days when, beyond the guarantee of the capital invested, they offered savers almost immediate availability and a return most often higher than the rate of inflation. Today, due to the continuous decline in interest rates across all bond markets over the past few years, they served an average dividend last year of 1.3% on average last year . And even if, by using part of their reserves, the insurers hope to distribute a coupon close to 2% for the 2022 financial year, we are far from the […]

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