After several lean years, the performance of life insurance funds in euros has picked up. To date, the majority of distributors have communicated the returns of their supports for the year 2022, and all, without exception at this stage, have announced increased performance.
Progressions for the most part fairly clear, often between 0.4 and 0.6 points, but for some greater than one point, which for the most part carry the base rates (i.e. without any particular bonus) of these funds at 2% at least, and for the best, at 2.5%, or even 2.8% (Garance, again in the lead this year).
Expected increase…
The rise in yields of life insurance funds in euros was expected: in the context of the rise in bond rates, insurers pampered the performance of their vehicles.
The level of this rise, however, is a good surprise, rather higher than expected. While, according to the experts, the market average was between 1.10% and 1.30% for the year 2021, ” it would not be surprising if this average exceeds 2% “, anticipates Stellane Cohen, president of the broker Altaprofits, which distributes life insurance contracts Generali, Suravenir and SwissLife.
” It’s a market consensus, and it’s very virtuous for saversrejoices the president of Altaprofits, because it is not because government bond rates have risen that the impact has been immediate for funds in euros. Due to their composition, and/or their size – the largest funds are endowed with several tens of billions of euros – the impact of the rise in rates takes a long time. Insurers have therefore made special efforts to distribute these increases in yield. »
2%, the symbolic bar to reach or exceed
In other words, when the portfolios of their funds in euros did not make it possible to pass on the rise in interest rates endogenously (by replacing old bonds, which had reached maturity, with new, more profitable ones), the insurers drew on their reserves (the “provision for profit-sharing”, this compulsory envelope which belongs to the policyholders, and which must be topped up annually), and/or cut back on their management fees to reach, or even exceed, the 2% mark.
A symbolic bar, since it corresponds to the current rate of the Livret A, and on which the market wanted to at least align itself, and as far as possible exceed it, while its yield will be raised to 3% in February , and probably more next summer.
This is how Afer, the largest association of life insurance savers in France, made use of its entire reserve (fairly recent since it was set up six years ago) to boost the return of its euro fund from 1.7% in 2021 to 2.01% this year.
Frank ascents of more than one point
In this sense, the rise in these yields is the most spectacular for contracts whose rates served were below the average last year, and for some well below: Milleis – which was the first institution to reveal its current rate December – rose from 0.95% to 2.15%, or even Predica, a subsidiary of Crédit Agricole Assurances, which signs contracts for its banking network and LCL, applied an increase of 106 basis points to the all of its funds. In the endat least a dozen contracts on the market, will be among the best students this year after wearing the dunce cap in previous seasons.
Admittedly, all financial investment specialists repeat it over and over again: comparing the Livret A booklet with a life insurance product is not relevant. The first is 100% free, ideal for precautionary savings, immediately available but with a limited ceiling (€22,950); the second, with no limit on payments, is a long-term investment, which can be adapted according to one’s profile (by taking more or less risk), a supplementary pension support and an excellent transmission tool thanks to to its attractive taxation.
But the popular notoriety of the Livret A savings account – an investment that received particular media coverage this year “thanks” to inflation – and the real competition it represents for insurers in the segment of “modest” savers, and especially young people, have de facto weighed, and significantly in insurers’ revaluation decisions.