Life Insurance: The Three Revolutions of Increasingly Innovative Investing

Life Insurance: The Three Revolutions of Increasingly Innovative Investing

At the end of 2021, 1,876 billion euros were invested in this old savings product, more than the GDP of Spain or Italy! Against all odds, life insurance remains the investment of choice for the French. Reassuring but also increasingly innovative. “The major innovations have to be attributed to digital and the diversity of financial media that can now be accommodated there,” explains Hughes Aubrey, Executive Committee Member of Generali France – which is also the main supplier and partner for FinTech such as Altaprofits, Nalo, Cashbee, Ritchee, Goodvest, etc. .

Another reason is social responsibility (SRI) and impact on investment. “Within five years, the current offering will have disappeared in favor of the entire SRI offering,” predicts Daniel Collignon, managing director of Spirica, a subsidiary of Crédit Agricole Assurances.

1/ Shorten deadlines

As in key parts of the financial industry, everything can be done online today. But there are always delays with life insurance, and it’s often related to regulations. “For example, we lack speed,” notes Daniel Collignon. In fact, when you make a withdrawal, the amounts are not immediately credited to your account, as is the case with a simple bank transfer. “The insurance company has two months to pay the money according to the law,” continues Daniel Collignon. Depending on the companies, the delay is rather long. “The customer journey remains very uneven depending on the operators: some offer online withdrawals with funds transferred within 48 hours to your bank account, but in other places it can easily take four to six weeks … or even much more. Insurers block all transactions until you update your customer profile or justify a refund just to meet a cash need!” says Cyril Chartier-Casteller, founder of Good Value for Money. “We are committed to a 72-hour period, provided we have collected all information required by the regulations,” according to Huggs Aubrey.

limited offer. 2 months for 1 euro without commitment

Ditto when judging between financial support, which again can take several days, the de facto prevents you from using life insurance as a stock market trading product. “At Spirica, we’re committed to a 24-hour response time,” explains Daniel Collignon. Obviously, if life insurance makes headway, it’s neither a bank account nor a stock account! May well be in mind.

2/ Wide range of financial support

We can now put almost everything into the correct life insurance contracts (Read our special issue of L’Express on April 7th) : mutual funds of all kinds (stocks, bonds, diversified), real estate funds (OPCI, SCPI or SCI), securities (limited to some major stock exchange indices, such as CAC 40, SBF 120 or Eurostoxx 600 for example), private equity, Private debt, structured products, etc. This diversity is welcome in order to be able to adapt to different financial market conditions. “For a long time, asset allocation within contracts was simpler. To simplify, we put 70% on the Euro-secured fund and the rest on some good diversified funds like Carmignac or DNCA funds or others. Bad years, the return was close to zero, and the good return, it increases by 1% or 2% of the fund’s euro-guaranteed remuneration,” explains Hugues Aubrey. Today, with a Euro fund that rewards between 1% and 1.50%, it is clearly necessary to change the way it works and rely on the various forms of support available in the contract to hope for a particular performance. “The standard allocation has changed. It is now a third of funds in Euros, a third on equity or diversified UCITS and a third on alternative vehicles such as real estate, investment funds. And infrastructure or some private equity funds, which have lower volatility and which benefit progressively,” continues Hughes Aubrey . Hence the importance of benefiting, within your contract, from all the support necessary to achieve this.

The latest novelty is the introduction of private equity (funds that invest in unlisted companies), which are made possible by first Macron’s law, then Pacte’s law. Most of the offered funds are only open for subscription for a certain period (the insurance company buys 50 million euros, for example, from a private equity fund, and as soon as it is resold to policyholders, the fund is closed) and liquidity is subject to a whole series of conditions. With this kind of money, if you are late in making a decision, it passes you by and you have to wait for your insurance company to offer you another one. “From now on, ‘evergreen’ private equity funds appear, which are always open to subscription and have much greater liquidity,” explains Daniel Collignon. Spirica has also specialized in these private equity funds. He continues, “We try to offer all of those predisposed to life insurance in our contracts, currently seven or eight contracts, and guarantee liquidity and therefore possibility of withdrawal, on every valuation date (every two weeks)”.

3/ Support in financial management

In the 2000s, online brokers (Altaprofits, Linxea, etc.) have brought a lot of innovation to the life insurance market, with formulas in which most of the management has been implemented remotely online, and at lower costs (0% entry fee). and arbitrage) and with supermarkets with real financial backing where the saver can choose between more than 1000 units of account or funds. Today, fintech companies have taken another turn, which is simplification and education. “The new generation of online brokers, such as Yomoni or Nalo, have divided their offerings by customers,” says Hugues Aubry. Offering endless financial support as the client has had trouble finding their junior, has been replaced by a much simpler marketing promise: the broker offers you to manage your money (via bot advisors), according to your situation and situation. needs. You just have to choose the right profile, there are ten in Yomoni, from the most cautious to the most dangerous.

Nalo has another approach: Each of your projects corresponds to a management profile driven by a superior algorithm. “If you want to buy your home in five years, finance your children’s education in fifteen and prepare for your retirement in thirty years, we offer you, within the same contract, three different financial management options, each fully compatible with your goals. In them the share of assets will vary. as risky as a stock,” explains Albert Dantord, Nalo’s Director of Special Clients. It is very easy to understand: the financial management of each project.

More traditional insurance companies also offer financial management authorization 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 as financial support multiplies.

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Dario Ingiosto / L’Express


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