Market Trends of France Life & Non-Life Insurance Industry
This section covers the major market trends shaping the France Life & Non-life Insurance Market according to our research experts:
Significant Growth Contributed by the Non-Life Insurance Sector
According to the statistics published by La Banque de France, the gross earned premiums of the non-life insurance sector witnessed a growth of 6.9% in 2021 compared to that in 2020. This surge was observed in nearly all lines of non-life insurance. Motor insurance, property & casualty insurance, and building insurance contributed to the highest growth in terms of direct written premiums.
Moreover, although the level of claims in direct business was relatively steady, the accepted reinsurance claims displayed a notable growth of 26% from 2020 to 2021.
A Surge in Unit-linked Business Benefitting the French Life Insurance Sector
In 2021, unit-linked net inflows recorded a high of USD 26.47 billion in the first eight months, and unit-linked premium revenue is expanding. The growth is credit-positive in absolute terms since the profitability of the unit-linked business is driven by management fees, which are generally based on fund size. It also requires less capital than typical life insurance savings businesses with built-in investment guarantees, and their profitability is less vulnerable to interest rates.
The growing significance of unit-linked business, which accounted for 38% of the sector's premiums in 2021, reflects French insurers' strategic initiatives in recent years in response to ultra-low interest rates. The insurers looked to reduce their reliance on traditional, capital-intensive savings products by promoting unit-linked and pension products where customers bear the investment risk.
