The exception of 2019 should become the rule in 2020. According to estimates by Facts & Figures, the average rate served on funds in euros for life insurance contracts could fluctuate between 1% and 1.1% this year, net of fees. management, against 1.33% in 2019. Last year, several insurers, such as Swiss Life et Generali , had hit the headlines by communicating a rate of return of 1% on their funds in euros. The trend in interest rates, which are again negative for French public debt, does not argue in favor of a rise in yields. The decline should continue, but up to a certain limit.
“We are heading towards a landing of the rate served on a floor of 0.5 to 0.7% within two to three years”, believes Cyrille Chartier-Kastler, founder of Facts & Figures. According to the expert, the new device allowing to integrate the provision for profit-sharing (PBB) in the solvency ratio could play a role of shock absorber to the fall of the yields. Consequence: for equal capital, life insurers can take more risk on portfolios, for example by increasing the portion invested in equities, to seek more return.
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