Life insurance: why you might soon be rubbing your hands

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Savings seem to be doing well in this period of inflationary crisis. Holders of Livret A – or other comparable regulated products such as the Livret de développement durable et solidaire (LDDS) or the Livret d’Epargne Populaire (LEP) – have indeed something to rub their hands with: the rates of return of these investments have been revalued, as Planet previously explained. As of Monday, August 1, 2022, the rate of remuneration for the Livret is 2%, in accordance with the proposal of the Governor of the Banque de France. That of LEP rises to 4.6%. In either case, however, this is not enough to offset inflation, which INSEE measures at 5.8% in France in June, recalls Le Progrès.

If this is obviously not enough to put savings back in the foreground, there may be something to make life insurance holders jealous. Is right ? Maybe not, recalls the online bank Boursorama on its information site. If the State is not responsible – or, at least, not directly – for the economic situation, it could still lead to higher rates for certain life insurance contracts. And this time, it is perhaps the European Central Bank (ECB) that we should potentially thank…

For the first time since 2011, the ECB raised key rates by 0.50%. This is, in this case, an attempt to regain control of the inflation observed throughout the euro zone. In June 2022, the latter was estimated to have increased by 8.6% over one year.

Such a measure, it goes without saying, has multiple impacts. It can be brutal for some heavily indebted, which the organization says it has been careful about. But it can also delight some French savers…

The rise in ECB rates, continues Boursorama, will indeed have an impact on the life insurance of French women and men. At least, for all those who have opted for funds in euros. These are indeed composed of 80% government and corporate bonds, on average, which means that a rise in yield should eventually occur.

That being said, the expected rise will be gradual… and less rapid than that of bond interest rates.

Some might therefore be tempted to take advantage of the rise in the yield of products such as the Livret A or the LEP to transfer the funds placed on a life insurance contract.

This is not a great idea, according to Boursorama, who recalls that such arbitrations could put insurers in difficulty… and push them to block such operations as provided for by the Sapin 2 law.

It would seem that the inflationary context is working in favor of life insurance. The preferred placement of the French signed its best first half since 2010, according to figures from France Assureurs. 76.4 billion euros in contributions were recorded in the first half of 2022, i.e. 0.7 billion more than in the first half of last year. A total of €12.1 billion was collected over this period; this is 1.8 billion more than in the first half of 2021.

It would seem that the inflationary context is working in favor of life insurance. The preferred placement of the French signed its best first half since 2010, according to figures from France Assureurs. 76.4 billion euros in contributions were recorded in the first half of 2022, i.e. 0.7 billion more than in the first half of last year. A total of €12.1 billion was collected over this period; this is 1.8 billion more than in the first half of 2021.

Savers have moved towards units of account, abandoning less profitable euro funds. Unit-linked contributions increased by 41% in the first half. The increase was 39% over the same period in 2021. Conversely, funds in euros recorded a negative net inflow of 8.8 billion.

To take full advantage of the returns of life insurance, it is still necessary to choose it well. Taking the time to compare different products is necessary for successful placement. Several criteria must therefore be taken into account in order not to be mistaken: