Savers deposited around 360 million euros more in March than they withdrew on their life insurance contracts, France Assureurs indicated on Friday, much less than in the previous two months due to a marked increase in output. In January and February, life insurance recorded net inflows of 1.2 billion and 1.1 billion euros respectively. By way of comparison, Livret A savings accounts recorded net inflows of 4.17 billion euros in March, more than ten times more than life insurance over the same period.
In detail, all the contributions, i.e. the sums paid on the contracts, totaled 14.4 billion euros in March (6% compared to March 2022) while the benefits (which including redemptions and payments in the event of death) amounted to 14 billion euros (21% over one year). Either way, it’s a record. “Year-to-date benefits are up €6.3 billion compared to the same period last year, to €38.9 billion. Redemptions represent 59% of benefits compared to 57% during the first quarter of 2022”, underlines France Assureurs in its press release.
In other words, if there is no explosion of withdrawals, these increase sharply, as do the deaths of life insurance holders. According to Franck Le Vallois, managing director of France Assureurs, the increase in redemptions can be explained by “inflation which remains at a high level”, which “may lead some savers to dip into their long-term savings to cope with to short-term needs”, and the tightening of real estate credit, which often requires “a greater personal contribution than before”. As for several months now, euro funds, a traditional insurance product whose capital is guaranteed, experienced outflows in March, amounting to 2.76 billion euros.
This was offset by positive net inflows of 3.13 billion euros for unit-linked (UA) investments, potentially more profitable but also more risky. Over one year, total life insurance outstandings increased by 1.5%, to 1,884 billion euros.
