Life insurance confirms its momentum under the scrutiny of the regulator

Life insurance is doing well, better in any case than savings on passbooks. In April, net inflows reached 2.2 billion euros, up from April 2021. “Since the start of the year, life insurance has maintained its growth momentum, despite economic uncertainties”, welcomes Franck Le Vallois, Managing Director of France Assureurs, which compiles this data each month. This momentum is fueled in particular by retirement savings plans (PER), ie nearly 600,000 additional policyholders since January. At the end of April, some 3.2 million people now held a PER for an outstanding amount of 39 billion euros.

As in previous months, net inflows in April were driven by unit-linked contracts, the capital of which is not guaranteed (3.1 billion) while euro funds with guaranteed capital continued to outflow, to the tune of 900 million euros. In total, over the first four months of the year, gross inflows (contributions) on life insurance approached 55 billion euros, its highest level for this period since 2010. And net inflows returned to a peak since 2011 at 10.5 billion euros.

Outstandings increased by 1.1% over a rolling year to 1.847 billion euros, which confirms its position as the preferred financial investment of the French. Insurers now like to detail their investments to underline their role in financing the economy. Thus, at the end of March, private equity represented an outstanding amount of 30 billion euros and 47 billion were invested in assets linked to infrastructure. Finally, sustainable finance now weighs 215 billion euros (11% of the total).

Faced with the opacity of commissions, the issue of transparency

Behind these good figures, life insurance is also getting ready to ensure better transparency of commissions, particularly on unit-linked units which compile several types of commissions. Since June 1, insurers are now required to post a summary table of the main costs of each PER contract online. And from July 1, they will have to do the same for units of account. “ It is a commitment made by the profession., recalls Franck Le Vallois. And it is held. “At least I don’t have any information to the contrary,” specifies the manager of France Assureurs.

Last year, a report by the Financial Services Advisory Committee (CCSF) highlighted the opacity of the commissions levied at different levels, including a part in retro-commissions supposed to remunerate the work of the adviser. This work has also become all the more essential as life insurance contracts are becoming increasingly complex to grasp with the rise of unit-linked products (39% of gross inflows in April).

This duty to advise is also an obligation closely monitored by the regulator. Bercy also pointed out last year the “excessive” fees on the PER. According to a study carried out last year by the firm Fact & Figures, the stacking of costs on account units represents an annual charge for the insured of between 2.5% and 3%.

Consultation of professionals during the summer

The subject is delicate. On the one hand, the commissions burden the performance of the contracts without the insured being fully aware of it. A growing issue at a time when inflation is reaching historic peaks and market performance is insufficient to hide the bill as in previous years. On the other hand, the nature of the contracts must ensure the remuneration of the insurers, the various media and the distribution networks.

“Distribution deserves fair compensation”, recognized François Villeroy de Galhau, Governor of the Banque de France, during the presentation of the annual report of the Prudential Control and Resolution Authority (ACPR), last Tuesday. But, according to him, “who says just says open, and who says technical does not mean opaque”. In essence, even if he does not have to decide on trade policy, the governor believes that transparency is a prerequisite for lowering commissions.

The regulator does not intend to stop in such a good way. The ACPR conducted an in-depth study on life insurance by comparing different parameters, such as commissions, yields offered or the nature of the supports. The results of this painstaking work “call for greater simplicity in the offer and a reflection to be carried out on the sharing of remuneration”emphasizes François Villeroy de Galhau.

Clearly, these results will be discussed with life insurance professionals during the summer, before being published in the fall. With, as a result, new recommendations that will complement the measures already in place, “to enlighten savers”.

” Our objective “confirms Jean-Paul Faugère, vice-president of the ACPR, in charge of insurance, “It’s good to make sure that the client’s interest always comes first. »