Insurers have accumulated a veritable nest egg with the profits of their funds in euros. It is estimated at more than 70 billion euros by the firm Good Value for Money at the end of 2021. A reserve that could well be used to increase the 2022 rates for funds in euros.
71.4 billion euros: this is the amount of the provision for profit sharing (PPB) life insurance at the end of 2021, according to the latest figures from Good Value for Money. The average level of yield placed on reserve goes 4.87% end of 2021an increase of 37 cents (4.5% in 2020).
At the end of July, in its report, the Prudential Control and Resolution Authority (ACPR) estimated that performance reserves reached a total of 63 billion euros for life insurance and capitalization contracts. This represents 5.4% of the total outstanding amount of these contracts.
Life insurance: these billions of euros put in reserve
Each year, this PPB is fed by the interest received on the bonds held in the funds in euros or by profits drawn from shares and real estate assets. This reserve cannot be kept indefinitely by the insurer, who has the obligation to return at least 85% of these profits to savers within a maximum period of eight years.
For several years, rates of return on life insurance funds in euros have been falling. The rates paid on euro supports will average 1.28% in 2021. At the same time, insurers set aside money each year.
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The PPB is a reserve of money fueled by the performance of funds in euros which is not immediately distributed to policyholders. She allows to smooth the returns of these funds from one year to the nextpreventing savers from suffering from the declines in government and corporate bond rates, of which the euro funds are mainly made up.
Only 5 insurers concentrate 65% of the provision for profit sharing in the sectorconstituting a yield reserve of 6.37% concerning them at the end of 2021.
- CNP Assurances (La Banque Postale): 14.97 billion euros of PPB at the end of 2021, i.e. a level of PPB in reserve of 6.10%.
- Prdica (Credit Agricole / LCL): 13.11 billion euros at the end of 2021, i.e. a level of PPB subject to 5.94%.
- ACM Vie SA and SAM (Crdit Mutuel Alliance Fdrale): 6.23 billion euros at the end of 2021, i.e. a level of PPB subject to 7.34%.
- Cardif Life (BNP Paribas): 6.34 billion euros at the end of 2021, i.e. a level of PPB subject to 6.13%.
- Sogcap (Societe Generale): 5.14 billion euros at the end of 2021, i.e. a level of PPB subject to 7.92%.
This year, insurers could well take back part of these funds to increase the rates of return on euro funds and not feed their reserves. A method which would make it possible to achieve, for the year 2022, a gross yield of between 1.80% and 2%.
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