Best’s Market Segment Report: AM Best Assigns Stable Outlook on French Life Market
A new Best’s Market Segment Report, titled “Market Segment Outlook: French Life”, states France’s life insurers enjoy a high level of market penetration through their privileged place in households’ investment portfolios. Life insurance savings products represent around 40% of households’ savings, with traditional savings contracts remaining the primary driver of income for the life insurance segment.
The low interest rate environment remains a key challenge for the segment. AM Best considers the French life insurers to be better positioned to navigate this challenge than their German peers. The estimated average guarantee on the traditional savings business is low, at around 0.5% for legacy business and 0% on new business. In recent years, insurers have sold traditional products with a 0% guarantee gross of management fees, effectively offering negative guarantees.
AM Best notes that unit-linked offerings are becoming a more important part of insurers’ business mix, reaching a historical high of
AM Best believes that the French life insurers are well positioned to navigate the persistently challenging environment. They have demonstrated discipline in recent years, strengthening their balance sheets and shifting their business mix to reduce the average guarantees in their savings books. These actions should contribute to the industry maintaining profitable results, despite the persistently low interest rate environment.
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=284228 .
AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Source: AM Best
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