Jennifer Rudden
Research Lead Financial Services & Real estate
For the French, life insurance represents a stable and attractive savings option. Allowing diverse and flexible conditions paired with lower financial risks, life insurance in France also grants certain fiscal advantages to its holders. For instance, payouts to beneficiaries are excluded from inheritance-related taxation according to French law. Furthermore, life insurance holders are not precluded from closing as many contracts as they wish. Also, this insurance option allows its holders to diversify their investments in order to further reduce the related risks and volatilities. Thus, producing a relatively safe and stable alternative for savings in France. As it is, almost 50 percent of French life insurance holders still perceived life insurance as a very attractive investment option in 2021.
Life insurance in France, a favored savings option
To put it into perspective, during the same year, life insurance was deemed by the French to be more attractive than buying shares. Further attesting to how well the French are acquainted with this investment product, nearly 45 percent of them claimed having at least one life insurance policy to which they made regular payments in 2018. In this matter, the French belong to the top 10 European countries by value of life insurance premiums per capita in 2020: This figure was around 1,960 U.S. dollars in that year, placing France ahead of other large insurance markets in Europe. Along these lines, the value of life insurance premiums per capita in France was greater than in Germany or Spain in 2020.Life insurance - still a profitable segment for French insurance underwriters?
However, the added value of life insurance premiums paid to underwriting insurance companies by the insured decreased during the 2015-2020 period: Despite positive oscillations, this figure went from a peak in July 2019 at almost 13.5 billion euros, to around 12 billion euros in January 2020. To further accentuate this issue, demographic realities might become a problem for French life insurance underwriters in the future. Paired with a decrease in the added value of premiums, the comparatively advanced age of life insurance holders in France might contribute to a decrease of revenue for French underwriters. According to 2018 figures, 46 percent of people aged 70 and older had at least one life insurance policy, in contrast with around 24 percent for people aged 30 and younger. For instance, the revenue of the French insurance company Aviva for the life insurance segment decreased from around 6.5 billion euros in 2016 to approximately 4.2 billion euros in 2020.
