Death insurance

Death insurance
Insurance in the event of death represents 7% of total contributions. We find here the "whole life" contracts, which allow the payment of a capital or an annuity to a designated person on the death of the insured regardless of the date, or the "temporary" contracts which only allow these payments if the death occurs over a period defined in advance (as for borrower insurance or education annuities). It should be noted that life insurance is an ideal tool for organizing one's succession, thus allowing adjustments in relation to inheritance arrangements, in favor of a disabled parent, grandchildren, etc.

Life insurance is therefore a rapidly growing product. Over the past ten years alone, outstandings have doubled, or 7.4% on an annual average. In all likelihood, this progression should continue.

Better still, in 2010 as in 2009, life insurance represented more than 100% of the flow of financial investments, all other investments being globally in outflow, either because of excessive risks (stocks, bonds, UCITS). ), or because of their too low profitability (A savings accounts, money market funds, term accounts). Thus, life insurance appears to be the only real vehicle for financial investment and there is no real alternative for savers.

Financing the economy

With its development, life insurance makes it possible to sustainably finance the economy of our country. The life insurer is indeed a leading institutional investor, able to collect and mobilize long and stable savings.

Also life insurance, like non-life insurance, in particular in the economic situation we have known with the financial crisis, contributes significantly to the financing of the State's debt. Beyond the importance of this financing, insurance investments primarily concern companies: company securities, stocks and bonds combined, represent in market value more than half of the assets of companies. insurance.

18% of the outstanding amount at market value, or just under 300 billion euros, is directly or indirectly invested in equities. The development of life insurance and unit-linked policies in recent years has largely contributed to this orientation.

As for the financing of companies by subscribing to bonds, it is essential when it becomes difficult to raise capital on the stock market, as was the case recently.

Life insurance, whose assets represent 90% of the assets of insurance companies, is therefore of irreplaceable economic and social interest. It must still retain the means to play this leading role.

Threats and Risks

Understood in its contractual dimension, life insurance protects and strengthens wealth. It allows policyholders to enjoy the greatest security. The robustness of the sector during the major crisis that we have just passed through is a remarkably tangible illustration of this. However, the success of insurance depends on trust, and trust is nourished by stability. In this regard, a major threat lies in the fiscal and legal insecurity that regularly weighs on the sector.

The life insurance market remains extremely buoyant

Life insurance, like the entire profession, needs to evolve within a clear and sustainable regulatory framework. This being the case, it will also be necessary to ensure that the right balance is always sought between the necessary level of regulation and the part left to the freedom of enterprise, a necessary condition for innovation. In other words, for life insurance to remain the best instrument for protecting and developing wealth, so that it can always better meet the expectations of policyholders, it will be necessary to make the right trade-offs between the needs. the economy and the interests of policyholders. From this point of view, the announced reform of heritage taxation for 2011 should enlighten us on the intentions of the public authorities.

Along with the exogenous threats hanging over him, the life insurer will also have every interest in protecting himself against himself, by avoiding in turn becoming a creator of his own risks.

New opportunities

However, optimism must be the order of the day. Indeed, the life insurance market remains extremely buoyant. Changing demographics and the deterioration of social accounts will make it increasingly necessary to resort to private, group or individual insurance, in addition to compulsory social protection schemes. New risks, the need for increased coverage and new expectations will enable life insurance to fully fulfill its function of social utility.