Life insurance: how to invest in solidarity funds?

Solidarity finance is progressing but remains mainly driven by employee savings Photo credit: GettyImages

Investing part of your savings in solidarity funds makes it possible to reconcile the search for financial performance and the financing of projects with social utility. In response to the search for meaning of a growing number of investors, banks, insurers and asset managers are turning to investments with a solidarity dimension. This trend is also due to regulatory changes.


  • What is solidarity life insurance?

  • Solidarity savings on the rise, but whose overall weight remains low

  • Solidarity funds: one wallet, two pockets

  • Identifying responsible investments thanks to the Finansol label

  • Solidarity funds more accessible in life insurance from 2022

What is solidarity life insurance?

Solidarity finance includes savings products aimed at financing projects or structures with a strong social and environmental utility. These actors, grouped together within the ESS (Social and Solidarity Economy), have various profiles: cooperatives, mutuals, associations, companies… This financing operates via two mechanisms:

  • sharing products, when you donate all or part of the income from your investment to an SSE actor;

  • financing products, which place money in these structures through loans or equity investments.

While seeking performance potential, solidarity savings allow investors to give meaning to their investments. By financing areas such as social housing or integration through employment and businesses located close to home, solidarity funds respond to the growing demand for proximity and positive social impact expressed by savers since the health crisis.

Solidarity savings on the rise, but whose overall weight remains low

Solidarity savings grew strongly in 2020. According to the La Croix/Finansol solidarity finance barometer, the outstanding amount of solidarity products jumped by 5 billion euros in 2020, to reach 20.3 billion euros. An increase of about 33%. In 2021, solidarity finance weighs almost seven times more than ten years ago.

Despite these encouraging figures, solidarity finance represented only 0.36% of the overall financial savings of the French people at the end of 2020. The outstanding balance of bank solidarity savings jumped by 59% last year, from barely 5 billion euros at the end of 2019 to almost 8 billion euros at the end of 2020. Solidarity finance remains however driven by employee savings, which constitutes a little less than 60% of the outstanding amount, with almost 12 billion euros placed.

While it represents more than 35% of household financial savings, life insurance accounts for less than 2% of solidarity savings outstandings.

Solidarity funds: one wallet, two pockets

Solidarity units of account are mostly so-called “90/10” funds. Created by the Fabius Law of February 2001, initially for employee savings in the form of Company Mutual Funds, subsequently declined in the form of FCP or Sicav, these funds are articulated around two pockets:

  • From 5% to 10% of the assets are invested in companies approved ESUS (Social Utility Solidarity Company) or another financial vehicle: venture capital companies (SCR), mutual funds for risk investments (FCPR), professional funds (FPS), provided that the assets of these funds are composed of at least 40% of securities issued by ESUS companies.

  • The remaining 90% to 95% are traditionally invested in the markets, in stocks or bonds.

What is ESUS Accreditation?

An SSE structure can obtain ESUS approval if its main objective is to produce goods or services with a strong social and/or environmental utility, aimed at vulnerable groups, or in favor of the preservation and development of the social bond, citizenship education, sustainable development, energy transition, cultural promotion or international solidarity. These structures cannot be listed on the stock exchange. They must also prove that the burden induced by their social utility activities has a significant impact on the income statement or on the company’s profitability. Finally, they are subject to a highly regulated pay scale.

Identifying responsible investments thanks to the Finansol label

Created in 1997, the Finansol label is awarded by a committee of independent experts and attests to the solidarity nature of a savings product, whether FCPs, but also FCPRs, FPSs and SCRs. The fund’s solidarity and transparency, the real level of management fees and the real solidarity rate of the 5/10 pocket are assessed in particular.

Finansol can now grant its label to three types of life insurance products:

  • funds in euros if at least 2.5% of the outstanding amount of the fund in euros is made up of solidarity assets and that 1% is ESUS approved;

  • units of account, if they meet the criteria allowing them to be considered as joint and several within the meaning of the Insurance Code and that the non-solidarity part of the fund is under SRI (Socially Responsible Investment) management;

  • complete contracts if their funds in euros meet the criteria of the label, and that all their units of account are labeled Finansol, SRI or Greenfin (“green” label).

If the Finansol label is a guarantee of transparency, it is not required by the Pacte Law to reference a unit of solidarity account in a life insurance contract.

Solidarity funds more accessible in life insurance from 2022

The Pacte Law (Action plan for the growth and transformation of companies) imposes new rules in terms of solidarity finance. Since January 1, 2020, insurance companies have been required to offer, as part of multi-support life insurance contracts, at least one unit of account backed by a solidarity fund, a fund benefiting from the SRI label or a Greenfin labeled fund.

From January 1, 2022, new multi-support contracts will no longer have to offer one of these three types of account units, but all three.

The obligation since 2010 to reference at least one solidarity FCPE in company savings plans has contributed to placing employee savings towards solidarity savings. It is therefore likely that this new regulation concerning life insurance contracts will in turn boost solidarity funds. As life insurance outstandings are twelve times higher than those of employee savings (more than 1,800 billion euros), this system could constitute an important lever.


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