Life Insurance: A Strong Start to the Year for the French People's Favorite Investment
Franck Le Vallois, CEO of the professional federation of insurers, announced that the life insurance sector had gotten off to a strong start in 2024, with net inflows of 2.4 billion euros in January. This amount is equivalent to the total for the entire year of 2023.
Franck Le Vallois welcomed this performance, stating that "2024 is off to a flying start for life insurance." January is traditionally a good month for savings, thanks to New Year’s gifts and a drop in spending after the holidays. This success contrasts with the modest results of Livret A savings accounts and Livret de Développement Durable et Solidaire (LDDS) accounts, whose interest rate has been kept at 3% by the government—well below the theoretical return.
Life insurance premiums reached a record high of 15.9 billion euros in January, a 12% increase from the previous year. Benefits, which include policy surrenders and death benefits, totaled 13.5 billion euros, a 3% increase.
Unit-linked products (ULPs)—investment vehicles comprising publicly traded stocks and bonds—continue to be favored by policyholders due to their higher potential returns, even though they carry greater risk. The share of premiums allocated to ULPs stood at 44% in January, compared with 39% a year earlier. Net inflows into UCs reached 4.7 billion euros in January.
Euro-denominated funds, which offer a capital guarantee but yield lower returns and are generally less attractive than the Livret A savings account, continue to struggle, with net outflows of 2.3 billion euros. The total outstanding balance of life insurance products reached a record high of 1,933 billion euros at the end of January, up 2.5% from a year earlier.
In January, the market for retirement savings plans (PERs) offered by insurers welcomed 75,800 new policyholders and recorded €912 million in contributions, including €299 million from transfers from previous retirement savings plans.
