Life insurance sales continued to fall in May for the third consecutive month. Withdrawals exceeded 2 billion euros, according to figures from the Fédération française de l'assurance (FFA). Read more.
Life insurance premiums down sharply
In May, nearly 5.7 billion euros were paid into life insurance policies, including 1.9 billion euros into unit-linked products and 3.8 billion euros into euro funds, according to FFA figures published on June 24. This is almost half the figure for the same period last year (11.6 billion euros) and for January and February of this year (12.1 and 11.2 billion euros).
FFA figures show a negative net balance for life insurance, at -2.2 billion euros. The amount of benefits paid out (8.5 billion euros) thus exceeds the amount of contributions paid in (6.4 billion euros).
How can we explain this phenomenon?
The sharp drop in life insurance policy deposits was mainly due to the implementation of containment measures to limit the risk of Covid-19 spreading. During this period, commercial activity, financial flows and the overall number of banking transactions were largely restricted.
As in every crisis, savers have been withdrawing from life insurance by making partial surrenders. However, industry professionals have noted a rebound in inflows since the beginning of the crisis. They believe that the outflow recorded over the period is a logical consequence of inactivity rather than a dislike of this investment by the French.
Livret A and LDDS, the big winners of the crisis
While life insurance inflows are declining, Livret A savings accounts continue to break records. In May, net inflows reached 3.98 billion euros. The Livret de développement durable et solidaire (LDDS) is not to be outdone, with net inflows of 1.16 billion euros. In total, over the first 5 months of the year, these two investments collected over 22 billion euros, compared with 13.7 billion euros over the same period in 2019 (+60%). Outstandings in these two products now total 433.4 billion euros.
Thus, with the coronavirus crisis, France's favorite investment went through a dry spell recording its worst score since late 2011, in the midst of the euro crisis. The confinement benefited online intermediaries. Indeed, during this period, 12% of savers realized that it was essential to be able to manage and consult their investments remotely, according to a survey conducted in April by Kantar for mes-placements.fr. There is every reason to believe that this type of management will become even more popular in the coming months.