Study and barometer — 05/02/2021
(AOF) – The coronavirus pandemic has increased regulatory, political and economic pressure on the French health insurance sector, but its positive growth, good profitability and “low capital intensity characteristics” (“capital-light features “) remain intact, says Fitch Ratings.
The rating agency estimates that French health insurers benefited from a 5% drop in compensation claims during the first containment and that they also did not bear the direct additional costs related to the pandemic. The French government then introduced a tax to offset excess profits made in 2020, making Fitch think the net effect on profitability is broadly neutral.
On the other hand, the agency considers that government intervention, and the regulatory changes that accompany it, constitute a major downside risk for the sector, as it can have a negative effect on the business profile and financial performance of insurers. . However, the sector has already been faced with multiple regulatory challenges and French health insurers should be able to adapt.
Finally, Fitch expects the health insurance industry to continue to grow over the next 12 to 24 months, driven by a structural increase in healthcare spending. Growth prospects intensify existing competitive trends in the industry, with traditional insurers gaining market share at the expense of mutuals.
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