Units of account represent a quarter of life insurance for the first time

Posted on Jul 30, 2021, 7:38 PM

Little by little, the lines of life insurance are moving. The first six months of 2021 were marked by the impressive rise of units of account (UC) in life insurance contracts.

In June, contributions in UC – investments potentially more profitable than euro funds for the saver (because they are invested in shares, in particular), but which do not guarantee the capital – amounted to 5.6 billion euros. euros, or 41% of gross inflows for the month (13.7 billion). “It’s an absolute record,” enthuses Franck Le Vallois, the managing director of the French Federation of Life Insurance, which publishes these figures this Friday.

The trend is now well established: since the beginning of the year, CUs represent on average 38% of contributions, against 35% in 2020. So much so that, for the first time, CUs account for a quarter of the total. total life insurance outstanding (1.840 billion euros), assures Franck Le Vallois. “The increase in units of account is driven by the good performance of the equity markets” which revalues ​​the outstanding amount in units of account, however tempers Philippe Crevel, director of the Cercle de l’Epargne.

Market evolution

However, the increase in UCs reflects real changes in the life insurance market. It reflects the desire of insurers to immunize themselves against the increasingly heavy costs of equity induced by traditional contracts, backed by funds in euros, which guarantee the capital of the saver.

By pushing for units of account, professionals are no longer required to meet these regulatory capital requirements, the risk being borne by savers. So much so that the outflow of life insurance last year (-6.5 billion euros) – in particular due to the closure of commercial networks – was not experienced as a dark scenario since, in hollow , this strengthened the CUs. In the midst of the pandemic, savers have indeed favored liquid savings and guaranteed savings accounts regulated.

Risk taking

With the first signs of an exit from the health crisis, the French now seem more inclined to long-term savings and risk-taking. This is evidenced by the health recovery of life insurance in 2021, accompanied by an increase in UC’s share.

With net inflows of 1.4 billion euros, the month of June marks the seventh month of positive net inflows and the sixth above the billion euros mark. Since the start of the year, cumulative net inflows have therefore reached 10.9 billion euros and the overall life insurance outstanding is up 4.4% over one year.

This recovery since the start of the year is however not yet sufficient to “compensate” for the net decline in collection recorded by insurance between March and November 2020, judge Philippe Crevel, director of the Cercle de Savings.

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