What is the star carrier of life insurance? Even if savers are turning away more and more easily, the fund in euros and its promise of guaranteed capital at all times remains the medium draining the most money. Last year, funds in euros served 1.28% annual interest on average. What about 2022 interest paid in early 2023?
Status quo around 1.30%? Slight rebound close to 1.50%? Restart more frank 1.80%? Or relaunch in arrow 2%? For several months, in view of the inversion of rate curves (inflation, ECB, government bonds, etc.), various scenarios have been put forward for the 2022 remuneration of life insurance funds in euros. With a constant: the average yield is expected to increase for the first time in the 21st century! Since the year 2000, the average yield of the star carrier of life insurance has indeed plummeted, falling from 5.30% in 2000 to 3.40% in 2010, before approaching 1% in recent years.
Obviously, the rebound in the return on funds in euros will be far from the surge in inflation, which currently exceeds 6% in France. Also far from the Livret A which has a very good chance of reaching 3% on February 1, 2023, and even further from the People’s Savings Book (LEP) which should exceed 6%, net of all taxes.
Livret A, LEP, LDDS… The rate increases that are looming in 2023 with inflation at 6.2%
The average rate for euro funds should be around 1.8% – 2%
As the weeks go by and as the start of the 2022 rate announcement season approaches (the first insurers are expected to reveal their rates of remuneration at the end of December or the beginning of January), the analyzes are refined. And confirm the forecasts sketched out this summer.
Life insurance: the average return on euro funds can reach 2% in 2022
At the start of August, Gildas Robert, director of actuarial and financial consulting at the consulting firm Optimind, explained that insurers will probably draw on the wealth set aside in recent years (the famous provision for profit-sharing, or PPB, supposed to smooth returns medium term) so as not to be left behind by the Livret A: Knowing the average rate served of 1.28% last year, and knowing that it was penalized by 0.3% of the PPB endowment [rendement financier mis en rserve, NDLR]we can start from a base of 1.58% [si les assureurs ne mettent pas en rserve cette anne]. Even if the context calls for caution, we can envisage a recovery in PPB equivalent to the allocations of recent years, which could lead to an average rate served of between 1.80% and 2%.
This analysis seems to be confirmed. In September, Cyrille Chartier-Kastler, founder of Facts & Figures, a leading research firm for life insurance, announced to him an average of between 1.60% and 2% net of management fees in 2022.
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The latest news report better rates approaching or exceeding the 2.50% mark, against only two funds in euros above 2% last year. A rise in yield rates is expected thanks to a mobilization of insurers’ reserves, confirms once again the economist and director of the Cercle de l’pargne Philippe Crevel this Thursday, December 1st. The average rate for euro funds should be around 1.8% – 2%. Taking inflation into account, it will be in negative territory [il ne compense pas la perte de pouvoir d’achat subie cause de l’inflation, NDLR] but should be close to that of Livret A.
It should be remembered, however, that a 2% rate net of management fees on a life insurance fund in euros is at least subject to social security contributions (and exempt from income tax depending on the age of the contract): a return net of management fees 2% only offers a remuneration net of social contributions of 1.66%.
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