Modern life insurance

 Modern life insurance

 

 

Modern life insurance in France was born in 1787. It is the result of the creation, authorized by an edict of Louis XVI (today we would say "approved by decision of the Prudential Control Authority"), of the Royal Company. insurance on human life. Today, the outstanding life insurance provisions exceed 1,300 billion euros, including 210 billion euros for unit-linked funds: these UC media weigh almost as much as all the UCITS shares held directly by the French savers and twice as many as the listed shares held by these same French people.

About ten years ago, when I was general delegate of the Groupement des assurances de personnes at the French Federation of Insurance Companies, I had the idea of ​​having the graph of the evolution of contributions drawn up. in personal insurance since the post-war period.

Surprise: this is an exponential, disturbed only by economic vagaries, unfortunately more and more frequent. This growth confirms the irreplaceable role of life insurance for our citizens and for our country. How did we get there ?

A very modern definition

This growth confirms the irreplaceable role of life insurance

In France, the history of life insurance began with the creation of the Royal Human Life Insurance Company, at the instigation of Etienne Clavière, a Geneva banker who would become the Prime Minister of Finance of the Republic, swept away during the Terror. A pioneer of genius, he leaves us with a beautiful definition of life insurance, of extraordinary modernity: “Life insurance is understood to mean a contract under which insurers receive annually, for a limited number of years, or once and for all, a certain sum, on condition of paying, on the death of one or more persons named in the contract1, any capital, or an annual annuity on the head of one or more persons similarly named in the contract. "Beyond the foundation of my profession, his vision of the role of insurance in society guides my professional life.
Renaissance

The Royal Company did not survive the Revolution, and it was not until the Second Empire that life insurance rose from its ashes.

Lift-off
Life insurance really took off with the development of the first free payment policies. It was at this time that savings associations were created: Amphitéa, partner of AG2R La Mondiale (1974), Afer (1976, partner of Aviva), Agipi (1976, partner of Axa).

She almost suffered a second death, swept away by inflation during the last war. To summarize the feeling of our compatriots, a guaranteed capital which allowed the acquisition of a car in 1940 represented little more than the value of the tires in 1945. Scalded, the French turned away from life insurance for a generation , thus concretely until 1970.

The French turned away from life insurance for a generation until 1970

Here we are again at our exponential: 1970 is the zero of the abscissas, the moment of take-off. Besides the "generational forgetfulness" factor, it seems to me that there is another fundamental explanation for this return to life insurance: solutions had been found to the dilemma of the technical rate and inflation. Indeed, while it is clear that the interest rate guaranteed a priori by life insurers must be capped at a level low enough to be sustainable for life, that is to say potentially for decades2, it is no less clear that a return on savings of 3.5% when gross bond yields exceed 10% leaves a feeling of disenchantment a posteriori; to put it mildly when you stack the gap over ten years or more.