Life Insurance: The Best Half-Year in Twenty Years
Net inflows totaled 36.5 billion euros from January through June—a level not seen since 2006—and assets under management stood at 2,162 billion at the end of June. Euro-denominated funds are once again becoming a selling point as the Livret A interest rate rises to 1.70 percent.
The figures released by France Assureurs on July 30 surprised even the insurers themselves. Premiums for the first half of the year totaled 108.8 billion euros, up 10.1 billion year-over-year, or 10 percent. Net premiums written, which exclude claims paid, came in at 36.5 billion, 8.9 billion higher than in the first half of 2025. You have to go back to 2006 to find a half-year period with figures of this magnitude.
Total assets under management reached 2,162 billion euros at the end of June, up 6% year-over-year. The month of June alone generated 19.3 billion in contributions—a record for the month of June—and 6.7 billion in net inflows.
The breakdown is almost as interesting as the total. Unit-linked funds, which carry market risk, accounted for 39% of contributions over the first half of the year and 43% in June alone. In other words, six out of every ten euros continue to flow into euro-denominated funds, which offer capital protection, even though savers have had access to higher-yielding, risk-free alternatives since 2022.
The Comeback of the Euro Fund
This resurgence is not merely sentimental. The average return paid out for 2025 stood at 2.60 percent, unchanged from 2024, while the average performance of unit-linked products was 4.7 percent. The profit-sharing provision—the reserve from which insurers draw to smooth out returns—was reduced to 3.7% of assets under management, down from 4% at the end of 2024: consequently, a portion of the reported rates was financed by reserves rather than by the current returns on the portfolios.
The new generation of euro-denominated funds, launched starting in 2023 to capitalize on the rise in bond yields, offer projected profit-sharing rates ranging from 3.60% to 4.10%, net of management fees and before social security and income taxes, according to the distributors marketing them. These investment vehicles, which were long reserved for contributions that included a unit-of-account component, are once again being offered as 100% unit-of-account funds in certain contracts. However, investors should carefully review the composition of the underlying portfolio—which often includes a higher proportion of corporate bonds and unlisted assets than traditional euro-denominated funds—as well as the required commitment period.
The comparison with regulated savings accounts plays a significant role in the decision-making process. The Livret A and the Livret de Développement Durable et Solidaire rose to 1.70% as of August 1, up from 1.50% since February, following a decision made on July 15 and formalized by an executive order dated July 28. The Livret d’Épargne Populaire (LEP) remains at 2.50%, above the rate that would result from strict application of its formula. The next adjustment will take place on February 1, 2027. A euro-denominated fund offering 2.60% gross of social security contributions does not, therefore, clearly outperform a LEP yielding 2.50% net for the 40% of households eligible for it.
What Net Inflows Don’t Tell Us
A record half-year for net inflows means two things at once: that contributions are rising, and that redemptions remain subdued. It is the second point that deserves attention. Life insurance traditionally serves as a safety net for affluent households, and high net inflows often reflect a wait-and-see attitude, not an appetite for investment. Over the past year, French households’ cash has shifted toward liquid and guaranteed investments, against a backdrop of zero growth in the second quarter and purchasing power down 0.6% per unit of consumption.
The savings rate, which fell from 17.9% to 17.2%, also shows that households have begun to dip into their savings to maintain their spending. Record life insurance premiums and a declining savings rate are not contradictory: they involve two different groups of people. Those who pay in 108 billion over six months are not the same people who have to choose between filling up their car with gas and buying school supplies.
That leaves the tax issue, which will resurface in the fall with the 2027 budget bill. Life insurance accounts for 2,162 billion euros in assets under management and is subject to a special inheritance tax regime, making it a target regularly cited in reviews of tax expenditures. Nothing has been announced, no legislation has been introduced, and the administration has instead signaled its commitment to protecting individual savings in recent weeks. Savers who have grown accustomed to waiting for the budget vote before making decisions have one more reason to do so this year.
