Life insurance: socially responsible investment is on the rise

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Long considered to be lagging behind in “sustainable” finance, is life insurance catching up? The figures communicated on March 30 by France insurers (the former French insurance federation) in any case testify to a leap forward made in 2021 in this area. With a 33% increase in outstanding amounts of units of account (UA) displaying at least one sustainable finance label.

Within life insurance, units of account are investment vehicles that do not offer a capital guarantee, unlike funds in euros. In total, according to France insurers, 123.9 billion euros are thus invested via units of account labeled either SRI (State label for socially responsible investment) or Greenfin (State label for products dedicated to “green” finance), or Finansol (label dedicated to solidarity finance).

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These 123.9 billion euros invested “sustainably” represent around a quarter of the outstanding balance of life insurance units at the end of 2021 (499 billion euros) and a little less than 7% of the total life insurance outstandings, funds in euros included, so this time (1,876 billion).

“A societal need”

Since the start of 2020, all new multi-support life insurance contracts, i.e. contracts comprising units of account, must offer, at the option of the insurer, at least one SRI unit of account, or one unit of solidarity account (the “buffered” fund must in particular devote 5% to 10% of its assets to the financing of solidarity enterprises of social utility, known as ESUS) or a Greenfin unit of account.

And since the beginning of 2022, it is at least one account unit from each of these three categories that must be offered in all new contracts. Obligations resulting from the Pacte law (action plan for the growth and transformation of companies), voted in 2019.

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But if these units of account develop, “it’s not because it’s an obligation”, but because they “meet a societal need”made a point of specifying Florence Lustman, president of France insurers, during the presentation of these figures, evoking “a request from insured, in search of meaning for their savings ».

Weak solidarity and Greenfin UC outstandings

The “sustainable” units of account listed here are in fact mainly SRI labeled funds (they weigh 123.4 billion euros) – the outstandings of solidarity and Greenfin UCs remain low, at only 1.1 billion and 4.2 billion euros, respectively, according to data from France insurers.

In practice, units of account can display several of these labels (this is why the sum of investments per label is greater than the total of “sustainable” investments in units of account).

It should be noted that the figures presented by the insurers are much higher than those published in September 2021 in the report of the monitoring and evaluation committee of the Pacte law, a difference which the federation partly explains by methodological questions.

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