Life insurance: the three revolutions of an increasingly innovative investment

At the end of 2021, 1876 billion euros were invested in this old savings product, more than the gross domestic product of Spain or Italy! Against all odds, life insurance remains the preferred investment of the French. Reassuring but also increasingly innovative. “The main innovations are to be credited to digital and the diversity of financial media that can now be accommodated there”, explains Hugues Aubry, member of the executive committee of Generali France – which is also the main supplier and partner of fintechs such as Altaprofits, Nalo, Cashbee, Ritchee, Goodvest, etc.

Another groundswell is socially responsible (SRI) and impact investing. “Within five years, the current offer will have disappeared in favor of a fully SRI offer,” predicts Daniel Collignon, managing director of Spirica, a subsidiary of Crédit Agricole Assurances.

1/ Shortened deadlines

As in the main parts of the financial industry, everything can be done online today. But there are always delays with life insurance, often related to regulations. “For example, we lack immediacy,” observes Daniel Collignon. Indeed, when you make a withdrawal, the sums are not immediately credited to your account, as may be the case with a simple bank transfer. “The insurer has two months to pay you the money according to the law”, continues Daniel Collignon. Depending on the companies, the delay is more or less long. “The customer journey remains very uneven depending on the operators: some offer withdrawals via the Internet with transfer of sums in 48 hours to your bank account, but elsewhere, it can easily take four to six weeks… or even much more, some insurers blocking all transactions until you have updated your customer profile or justified in detail a redemption simply to meet a cash need!” says Cyrille Chartier-Kastler, founder of the Good Value for Money site. “We are committed to the 72-hour period, provided that we have collected all the information required by the regulations”, according to Hugues Aubry.

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Ditto when you arbitrate between financial supports, which can again take several days, de facto preventing you from using life insurance as a stock market trading product. “At Spirica, we are committed to a turnaround time of 24 hours”, explains Daniel Collignon. Clearly, if life insurance has made progress, it is neither a bank account nor a securities account! Might as well have it in mind.

2/ A wide choice of financial supports

We can now put almost everything in the right life insurance contracts (read our special issue in L’Express of April 7) : investment funds of all kinds (equities, bonds, diversified), real estate funds (OPCI, SCPI or SCI), securities (limited to certain major stock market indices, such as the CAC 40, the SBF 120 or the Eurostoxx 600 for example), private equity, private debt, structured products, etc. This diversity is welcome in order to be able to adapt to the conditions of the different financial markets. “For a long time, the allocation of assets within the contracts was simpler. To simplify, we put 70% on the guaranteed fund in euros and the rest on certain good diversified funds such as those of Carmignac, DNCA or others. bad years, the return was around zero, the good ones, 1% or 2% above the remuneration of the guaranteed fund in euros”, explains Hugues Aubry. Today, with a fund in euros which remunerates between 1% and 1.50%, it is clearly necessary to change the modus operandi and rely on the various supports available in the contract to hope for a certain performance. “The standard allocation has changed. It is now one-third on funds in euros, one-third on equity or diversified UCITS and one-third on alternative vehicles such as real estate, investment funds. infrastructure or certain private equity funds, which have lower volatility and which gradually capitalize”, continues Hugues Aubry. Hence the importance of benefiting, within your contract, from all the necessary supports to achieve this.

The latest novelty is the introduction of private equity (funds that invest in unlisted companies), which was made possible by the Macron law first, then the Pacte law. Most of the funds offered are only open for subscription for a given period (the insurer buys 50 million euros, for example, from a private equity fund and, once it has resold them to its policyholders, the fund is closed) and liquidity is subject to a whole series of conditions. With this type of fund, if you delay making up your mind, it passes you by and you have to wait for your insurer to offer you another one. “From now on, ‘evergreen’ private equity funds are appearing, which are perpetually open to subscription and much more liquid”, explains Daniel Collignon. Spirica has also made a specialty of these private equity funds. “We try to offer all those formatted for life insurance in our contracts, currently seven or eight, and we ensure liquidity and therefore the possibility of withdrawal, on each valuation date (every fortnight)”, he continues.

3/ Support in financial management

In the 2000s, online brokers (Altaprofits, Linxea, etc.) brought a lot of innovation to the life insurance market, with formulas where most of the management was done remotely via the Internet, at lower costs (0% entry and arbitration fees) and with veritable financial support supermarkets where the saver could choose between more than 1,000 units of account or funds. Today’s fintechs have taken another turn, that of simplification and education. “The new generation of online brokers, like Yomoni or Nalo, have segmented their offer by clientele,” says Hugues Aubry. The display of an infinite number of financial supports where the customer had trouble finding his little ones, has been replaced by a much simpler marketing promise: the broker offers you to manage your money (via robo-advisors), according to your situation and your needs. You just have to choose the right profile, there are ten at Yomoni, from the most cautious to the most risky.

Nalo has another approach: each of your projects corresponds to a management profile driven by a super algorithm. “If you want to buy your home in five years, finance your children’s studies in fifteen years and prepare for your retirement in thirty years, we offer you, within the same contract, three different financial management options, each of which is exactly in line with your objectives. and in which the share of risky assets such as equities will vary”, explains Albert d’Anthoüard, director of private clients at Nalo. It’s very simple to understand: financial management per project.

More traditional insurers also offer financial management delegation solutions. According to the latest figures from the profession, the share of managed management has increased from 18% in 2019 to 31% in 2021. A necessity with the multiplication of financial supports.

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