Life Insurance: Rates make a big difference

A new disappointment at Afer and Gaipare. After last week’s announcement of sharp yield increases for many of the big names in life insurance Euro funds, two savings associations announced slightly higher rates on Tuesday and, as last year, significantly below the market average.

At Gaipare, whose contract is managed by Allianz, the annual yield goes from 2.20% in 2022 to 2.30% for 2023. At Afer, it goes from 2.01% to 2.22%. . In the past, Abilly Assurance’s savings association partner gave “the” during its January announcement, announcing one of the best rates on the market. This was before Massif’s acquisition of the former Aviva France.

Booklet A Ref

Today, others are stealing the show, notably MACSF at 3.10%, Garens at 3.50%, La France Mutualiste at 3.70%, or even Corum EuroLife at 4.45%. In a sign of the ongoing war on the market, Société Générale Assurances for its part recorded a stunning hike, from a minimum of 1.60% to 2.85%. MAAF and GMF also reach this level, at 2.8%.

This is now no more than 3% away from Leverate A. Since last year, the main product of regulated savings has in fact become the new benchmark in the life insurance market, now bringing in more funds than the euro. First since 1982. The latter certainly served a rising average yield for the first time in thirty years, but it only reached 1.91% in 2022, according to ACPR, the sector regulator.

For 2023, the Facts and Figures firm expects an average of 2.50% for this major life insurance product. Gaipare and offer are not less good doers. AXA, which has scaled back in this market, and La Mondiale (on certain contracts) offer a base rate of 2% and MMA 2.25%. Another player in the French market, CNP, announced a floor rate of between 2.15% and 2.50% on Tuesday evening.

The gap is widening

Even if units of account (UC) or “bonuses” given to holders of Eurocruisance contracts can increase the annual remuneration of certain contracts, the gap between the lowest bidders and the most offensive, such as Quorum Eurolife, one of the latest products, is widening. on the market.

This Euro fund, insured by SwissLife, shows an annualized return of 4.45%, extrapolating the performance of the second half of 2023 to one year. To achieve this level of remuneration, the insurer has invested in the government and government bonds. Recent companies, therefore well paid thanks to the increase in interest rates. Historical euro funds are still partially stuck in their past investments, in the era of very low rates.

Apart from financial management, the level of reserves is another differentiating factor between players. This provision for profit sharing (PPB) is supposed to avoid hard hits. In general, a rapid increase in interest rates starting from 2022, which destabilizes the model of Euro funds facing strong outflows (more than 25 billion euros last year at the end of November).

reserves

Some ant insurance companies, especially bancassurance, have accumulated reserves and will be able to distribute them for another five or six years to increase their returns. Others, more grassroots, such as Afar, have shared the fruits of investment over time. Affer thus pulled 115 million euros from its PPB to raise its 2023 rate, and it still has 219 million in provisions, according to figures released Tuesday by its president Gerard Beckermann.

“We refused to play with PPB, which is a regulator,” he declared during a press briefing. This represents 0.54% of the fund’s assets in euros, compared to 0.80% at the end of 2022 and 5.4% on the market scale at that date.

On Monday, ACPR, the sector watchdog, called on insurers to draw on their reserves to raise yields on euro funds with capital guaranteed by companies. This redistribution should make it possible to retain savers and avoid an acceleration of redemptions that could destabilize the system.