Containment: net inflows of life insurance into the red in March 2020– Get a quote online

Life insurance

savings assvie

savings assvie

In March 2020, net life insurance inflows fell to € 2.2 billion, the first outflow of such magnitude in years. The containment due to the Covid-19 epidemic limits new business or new payments.

This will not surprise anyone: in March 2020, at the start of confinement, the French paid less on their life insurance contract than they drew in, according to figures from the French Federation of Insurance (FFA) published this Wednesday April 29, 2020. In total, net inflows are in the red at – € 2.2 billion in March 2020 (=> see the FFA graph).

In detail, in March 2020, the contributions amounted to only € 9bn, a very low level (in the past two years, the French have paid at least € 10 billion per month into their contracts). Conversely, benefits (redemptions + deaths) remained at a rather high level, i.e. € 11.2 billion. A manager of a large life insurance company told us at the end of last week that insurers did not (yet) feel any impact following the excess mortality recorded since the start of the health crisis. To eventually see an effect on life insurance statistics, you would have to wait several months.

Containment limits new business or new payments

More prosaically, the reasons are probably due to confinement, as raised Philippe Crevel, director of the Cercle de l'Epargne: “L’’life insurance was a victim of containment. Savers have been hampered in their movement due to confinement (…). They therefore did not have the opportunity to meet with their insurer during the second half of March, which limited the number of operations. ”

As for online payments, we have seen for several weeks that life insurance has a long way to go: “The proportion of policyholders who use the Internet to carry out arbitrations is lower than that of Livret A holders”, underlines -he.

The self-employed, well equipped in life insurance, draw cash from it

Another reason: in this period of economic uncertainty, the vast majority of French people therefore rather seek ease, particularly in leaving their savings on their current account or by depositing it on the booklet A or LDDS (€ 3.82 billion paid in March on the two regulated passbooks). “The traders, the craftsmen and the liberal professions which are, on average, well equipped with life insurance contracts, can no longer, for a large number of them, exercise their profession and have to face loss of income. This situation also explains the increase in benefits, some insured persons, who may have need for cash to meet unavoidable deadlines, ”says Philippe Crevel.

35% of contributions to units of account

Note that 35% of the contributions were paid on units of account, a level down over a month, but much higher than in recent years. Like the return of individuals for the stock market in recent weeks, some individuals may have decided to seize opportunities to enter the units of account after the fall in their valuation.

The French hold some € 1,741 billion in their life insurance envelope at the end of March 2020, (+ 1% over one year).

Carole Molé-Genlis