Good news, the average return on life insurance funds in euros should reach 2.5% in 2023. Despite this attractive performance, the rates of these funds will not be enough to compensate for inflation, estimated in September at 4.9%.
The average return on euro funds is expected to reach 2.5% in 2023, an increase of 30% compared to the year 2022. This is what reveals the latest 2023 Life Savings Barometer from Facts & Figures published this Thursday, October 26. An attractive average performance for these capital-guaranteed funds but be careful, there will be significant disparities between insurers, warned the consulting firm.
The universe of euro funds has become more complex. The market is no longer uniform at all. In this context, talking about an average rate, why not, but it is no longer very relevant, clarified to the thingsCyrille Chartier-Kastler, president of Facts & Figures.
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Up to 4.5% return for euro funds in 2023
A consequence linked to the rise in bond rates. The size of the fund in euros, its creation date and the insurer’s management policy in previous years will also impact this year’s returns. According to Facts & Figures, four types of euro funds can be identified. Those which will provide the best returns are, unsurprisingly, those created in 2023 such as those of Ampli Mutuelle and Corum Life. These should offer a performance between 3.5 and 4.5%reports again The things.
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Euro funds dating from 2020 and 2021 should yield between 2.8 and 3.8% in 2023. Compared to old funds which have considerable outstanding amounts, they are able to more quickly dilute the low rates of old bonds with the new bonds with high rates that they acquire, specified Cyrille Chartier-Kastler.
On the banks’ side, the expected returns for euro funds should be around between 2.6 and 2.8%. Finally, older funds with few provisions (PPB) should be remunerated between 1.8 and 2%.
As a reminder, in 2022, the average rate of funds in euros reached 1.91% according to the Prudential Control and Resolution Authority (ACPR). The Facts & Figures firm had estimated an average performance of 1.92% for life insurance funds in euros.
If the expected returns for 2023 are therefore much better, they will not be enough to compensate for the level of inflation which is expected to be 5% this year, according to the latest forecasts from INSEE.
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