Life Insurance Segment in France Expected to Grow at CAGR of 3% up to 2016, According to Timetric
13 Aug 2012 • by Natalie Aster
Life insurance was the largest segment in the overall French insurance industry during the review period, and it accounted for 65.9% of the total insurance industry’s written premiums in 2011. The segment retained its leading position in the industry despite recording a CAGR of -2.2% during the review period (2007–2011). This was mainly due to the ongoing sovereign debt crisis that affected the country’s entire financial services, including insurance. However, the French economy is expected to recover and grow at a CAGR of 3.6% over the forecast period (2012–2016), and the life insurance segment is therefore expected to grow at a CAGR of 3.0%.
The new report "Life Insurance in France, Key Trends and Opportunities to 2016" by Timetric states that pension products accounted for 78.9% of the overall life insurance written premium value in 2011. Pension plans have been the preferred type of life insurance products in France due to the country’s aging population, shrinking workforce and increasing public pension deficit. In 2010, the French life expectancy was 81 years, and the population aged above 64 years accounted for 16.8% of the total population. In addition to their mandatory contributions towards pension funds, French people tend to invest their money in voluntary pension plans that are privately managed, such as company schemes or collective insurance contracts. The written premium generated from pension products is expected to increase at a CAGR of 2.0% over the forecast period.
The French life insurance segment is expected to remain competitive over the forecast period due to the country’s favorable regulations that allow foreign companies to enter the industry by establishing a new subsidiary or acquiring an existing company in the region. Foreign companies accounted for 21.5% of the overall French insurance industry in 2010. The ongoing debt crisis has caused French consumers to seek low-cost life insurance products with higher coverage, and life insurance companies are now facing tough competition on price.
Life Insurance in France, Key Trends and Opportunities to 2016
Published: July, 2012
Price: US$ 1.950,00
The increasing penetration of distribution channels across the country is expected to drive the growth of the life insurance segment over the forecast period. Direct marketing is one of the preferred distribution channels used by life insurance companies in France as it reduces their marketing costs and improves their profit margins. However, bancassurance accounted for 61.0% of the total life insurance written premium generated from distribution channels in 2011. Most leading French banks have established their own insurance companies and distribute life insurance policies through their own banking networks. With the expansion of other distribution channels, including e-commerce and telemarketing, life insurance companies are expected to expand their presence and revenues over the forecast period.
More information can be found in the report “Life Insurance in France, Key Trends and Opportunities to 2016” by Timetric.
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