Insurance united for a sustainable recovery
Like the entire country, the insurance sector was impacted by the crisis in 2020 but in this unprecedented context, insurers kept their commitments to their policyholders and even went beyond. They continued to protect their policyholders and made a significant contribution to supporting our country’s economy. The insurance sector is now playing a key role for a sustainable recovery.
Insurers united to help society through the crisis
Since the beginning of the crisis, the FFA and its members have been working with the public authorities to propose solutions to mitigate the crisis and prepare for the end of the pandemic. The insurance sector was the only sector to contribute EUR 400 million to the solidarity fund set up in favour of very small businesses and the self-employed. In total, the insurance sector spent EUR 1.7 billion on support measures in addition to the payment of claims. It also quickly proposed to the public authorities a compensation scheme for exceptional disasters following a pandemic (Catex).
The insurance sector, affected by the crisis, has shown its strength
“The year we have been through has required adaptation to an unprecedented crisis with whole sectors of the economy at a standstill, a stock market crash, and negative interest rates. However, this crisis has demonstrated the strength of the insurance sector. Every day, the 255,000 individuals that insurance employs were there for their policyholders and handled an average of 32,000 claims per day.” notes Florence Lustman, President of the French Insurance Federation.
- An insurance sector that protects:
Life insurance had an atypical year in 2020, with a net outflow of EUR 6.5 billion. Such a movement had not been observed since 2012. On the other hand, net inflows into unit-linked products increased to EUR 18.3 billion, reflecting the increasing orientation of the French towards diversifying their savings to improve their expected returns.
Healthcare and Providence Insurance
Complementary health insurance companies made themselves fully available to their policyholders. Benefits increased by almost €1 billion to €19.8 billion (+4.4%), faster than premiums (€25.2 billion, +1.8%).
Damage and Liability Insurance
Insurers continued to handle 32,000 claims per day, with a decrease in the number of motor claims but a sharp increase in professional/business insurance.
Benefits increased faster than premiums: +1.2% for premiums versus +2.1% for benefits.
In professional/business insurance, the strong increase in claims is largely due to business interruption and cancellation policies.
2020 confirms the constant increase in losses caused by Nat Cat claims observed over the last few years (Storm Alex in October 2020 and flooding episodes in the South East). Their cost is estimated at €3.1 billion in 2020.
Overall, for the businesses directly impacted by the Covid-19 crisis (motor, professional/business, healthcare, providence), claim payments increased by €2.9 billion year-on-year.
- An insurance sector that finances:
Insurance is one of the leading financiers of our country’s economy. In this time of crisis, French insurers intend to play this role to the full, in a responsible way, so as to boost the local economic fabric for the coming months and years, while responding to society’s long-term challenges.
Last year, French insurers had €2,658 billion of assets under management (up slightly on 2019).
The majority of this amount is invested in corporate assets: 60%, that is over €1,600 billion, broken down into 36% in corporate bonds and 19% in equities.
Insurers also fund public debt: they hold 17% of the French government’s marketable debt, making them the leading domestic financiers.
These investments allow us to support major transitions. Over the past ten years, investment in future-oriented infrastructure has more than quadrupled. Green and socially responsible investments exceed EUR 81 billion.
The insurance sector remains robust with a solvency ratio of over 200%.
- An insurance sector that employs:
The insurance sector is characterised by its great diversity of professions. In 2020, 149,100 individuals were employed by insurance companies and 255,000 individuals worked for the overall profession (intermediaries, adjusters, etc.).
14% of employees in the sector are under 30 years old and 60% of them are women.
The number of apprenticeships has doubled in 10 years and 70% of young people on these contracts are hired at the end.
Thanks to the quality of the social dialogue, the sector continues to be innovative. This is demonstrated by the branch agreement on gender equality, diversity and equal work opportunities in insurance companies, signed last October, which includes a major breakthrough: the encouragement to take paternity leave. Also worth noting: insurance is the first industry to have relaunched negotiations on teleworking.
The capacity of insurance investment to serve the priority of a sustainable recovery
In 2021, the sector’s top priority will be the recovery in all territories. We want to be a key player in this recovery”, says Florence Lustman. Our responsibility, my responsibility, is to unite all the energies of the insurance industry to move society forward with confidence. This is the essence of our mission, and it is now written into the FFA’s raison d’être.”
The insurers have launched, with the Caisse des Dépôts Group, the “Insurers - Caisse des Dépôts Sustainable Recovery France” programme. This is an investment plan of historic proportions, firstly in terms of its amount: EUR 2.3 billion, of which nearly 2 billion were invested by insurers. Secondly, in its method, because it is an action in which some twenty insurers are participating. Finally, by its ambitions and its responsible nature, since it aims to support French companies in the healthcare and tourism sectors as well as industrial SMEs and ETIs, all selected according to ESG criteria.