Life Insurance: A Golden Year for French Savings

Record Contributions and Moderate Withdrawals

In September, total contributions surged to €14.9 billion, a level never before seen for this period. This marks a 20% year-over-year increase, driven by the growth of both euro funds (+17%) and unit-linked accounts (UC) (+27%). Since the beginning of the year, cumulative contributions have exceeded €143 billion, confirming the market's vitality.

At the same time, disbursements (redemptions, reallocations, terminations) remained contained at €10.8 billion in September, down 6% since the start of the year. This moderation directly contributes to the improvement in net inflows and underscores renewed investor confidence.

This trend is especially noteworthy as euro funds, often criticized in recent years for their lack of returns, have recorded eight consecutive months of positive inflows, a first since 2019. According to Philippe Crevel, « savers are rediscovering the benefits of capital guarantee, in an environment where real rates remain low but stable."

An Investment That Has Become Competitive Again Compared to Regulated Products

The rebound in life insurance can primarily be attributed to the decline of the Livret A, which offers a 3% rate that is no longer tied to actual inflation, while euro funds provide an average return of around 2.6% after fees. The gap is narrowing, but the liquidity and tax flexibility of life insurance make it a more versatile instrument.

Savers are now looking to diversify their investments without sacrificing security. Unit-linked investments are benefiting from this appetite for measured risk: they have attracted over 32 billion euros since January, accounting for more than 80% of total growth. However, the share of unit-linked contracts in total contributions slightly decreased to 35% in September, compared to 38% for all of 2024. This trend is due to a renewed interest in euro funds, which have become competitive again in the short term.

This intra-product reallocation illustrates rational arbitrage behavior: households retain the advantageous tax and inheritance structure of life insurance while adjusting the composition of their assets to the current market conditions.

A trend expected to continue until the end of the year

With a total of 2,084 billion euros at the end of September, up 5% over the year, life insurance confirms its role as the backbone of the French financial assets. Experts anticipate an annual net inflow close to 50 billion euros by December, a level comparable to 2010, before the decade-long outflow period from 2010 to 2020.

This success is also due to a psychological factor: in a context of geopolitical and stock market turmoil, life insurance remains the ultimate safe haven, perceived as more stable and less volatile than a stock portfolio. Savers favor transparency and predictability, two qualities that explain the enduring popularity of life insurance contracts in the hierarchy of investments.

In the longer term, however, the market might face two limitations: the aging of policyholders (the average age of policyholders exceeds 57) and the increasing complexity of regulatory decisions (notably concerning sustainable funds and the integration of ESG criteria). But for 2025, the trend is clear: the revival of life insurance is indeed underway.