Market Guide: Life Insurance and Pensions in France 2006

This report is most appropriate for companies looking for an overview of the life insurance and pensions markets in order to assess the level of market opportunity (using our market data and forecasts), regulatory barriers and opportunities, and level of competition in the market. For more detailed market data please refer to Datamonitor's European Life and Pensions Interactive Database 2006.

Report Highlights


The enactment of the IORP directive creates new product development and market development opportunities for French insurance companies by expanding the range of investments for pension funds beyond those that are currently specified in France and by creating a potential market for French products abroad. The Economic Confidence and Modernization Act (the Breton Act) introduced a new class of contracts called diversified life insurance policies. These extend the range of possible insurance solutions to include products that offer both security and profitability. New products of this type were expected to be launched in 2006. Insurance is distributed via tied agents, brokers, salaried sales forces, direct writing insurance mutuals, financial institutions, direct marketing channels (mailers, telemarketing, Internet) and alternative channels (mass retailers, automobile manufacturers). Financial institutions and sales forces of insurance companies dominate the life sector.
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EXECUTIVE SUMMARY - MARKET HIGHLIGHTS 3
Market overview 3
Market forecasts 3
Market regulation 3
Competitive market structure 4
Market leaders 4
INTRODUCTION 10
What is this report about? 10
Who is the target reader? 10
How to use this report 10
CHAPTER 1 MARKET OVERVIEW 11
Introduction 11
Life premiums accounted for 93% of total premium income in 2005 12
The proportion of premium income attributed to individual policies increased marginally between 2003 and 2004 13
Following a decline in 2002 and 2003, premium income from non unit-linked insurance increased in 2004 and 2005 15
Bonds and money market instruments consistently account for at least 70% of the investment assets of life and pensions insurance companies 16
CHAPTER 2 MARKET FORECASTS 18
Introduction 18
Key findings 18
Over the next 5 years, premium income is set to grow at an average annual rate of 8% 18
CHAPTER 3 MARKET REGULATION 20
Introduction 20
Key findings 20
The Insurance Supervisory Authority and the Committee on Insurance Companies regulate the French insurance sector 20
The IORP directive creates new market opportunities 22
Legislative reform enhances the range of options for policyholders 23
Insurance companies which belong to financial conglomerates face additional supervisory requirements 23
New regulations on information provided to policyholders aim to improve consumer protection 23
The Insurance Intermediary Directive creates a single passport for insurance intermediaries and enhances consumer choice 24
Legislation on distance marketing defines sales practices 24
Upcoming legislation will enhance consumer protection 25
Proposed anti-money laundering legislation implies an additional administrative burden for insurance companies and brokers 25
CHAPTER 4 COMPETITIVE MARKET STRUCTURE 26
Introduction 26
Key findings 26
French life insurance companies dominate the market, by number 27
The top 5 life insurers control 56% of the market, by premium income 28
Financial institutions account for 62% of life and capital redemption premium income 30
CHAPTER 5 MARKET LEADERS 32
Introduction 32
Key findings 32
CNP Assurances is the life insurance market leader, based on premium income 32
Predica/Pacifica trails the market leader in the life insurance sector 32
Axa ranks third among life insurance companies 33
AGF is the fourth highest ranked life insurer by premium income 33
Groupama rounds out the top 5 life insurers 34
APPENDIX 35
Definitions 35
Capital redemption policy / bond 35
Composite insurer 35
Defined contribution pension scheme 35
Defined benefits pension scheme 35
Group policy 35
Individual pension scheme 35
Individual policy 35
Life assurance 36
Occupational pension scheme 36
Pension insurance policy 36
Premium income 36
Regular premium 36
Single premium 36
Technical provisions 37
Traditional insurance 37
Unit-linked insurance 37
Further reading 37
Interactive Databases 37
Reports and Briefs 37
Wealth, Investments & Protection writing team 38

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Table 1: Life and pensions insurance premium income, segmented by product, EURm, 2001-2005 12
Table 2: Life and pensions insurance premium income, segmented by product, in percentages, 2001-2005 13
Table 3: Life and pensions insurance premium income, segmented by buyer, EURm, 2001-2005 14
Table 4: Life and pensions insurance premium income, segmented by buyer, in percentages, 2001-2005 14
Table 5: Life and pensions insurance premium income, segmented by investment risk, EURm, 2001-2005 15
Table 6: Life and pensions insurance premium income, segmented by investment risk, in percentages 16
Table 7: Investment assets of life and pensions insurance companies, EURm, 2001-2005 17
Table 8: Investment assets of life and pensions insurance companies, in percentages, 2001-2005 17
Table 9: Life and pensions insurance premium income, segmented by product, EURm, 2006-2010 19
Table 10: Life and pensions insurance premium income, segmented by product, in percentages, 2006-2010 19
Table 11: Number of life insurance providers segmented by type, as at Dec 2005 27
Table 12: Top 5 life and pensions insurers by premium income, as at Dec 2005 29
Table 13: Life and capital redemption insurance premium income, segmented by distribution channel, in percentages, Jan-Dec 2005 31


Figure 1: Over the last 5 years, the proportional distribution of life and pensions premium income has been consistent 12
Figure 2: Individual policies account for the majority of life and pensions premium income, increasing by roughly 10% p.a. on average, over the last 5 years 13
Figure 3: In the last 5 years, average annual growth in premium income from non-unit-linked insurance has outstripped growth in unit-linked premiums 15
Figure 4: In 2004 and 2005, there were slight increases in the proportion of equity investments of life and pensions insurance companies 16
Figure 5: Pensions will account for an increasing proportion of the growth in premium income between 2006 and 2010 18
Figure 6: 86% of all providers are French life insurance or composite companies 27
Figure 7: CNP Assurances leads the French life and pensions sector 28
Figure 8: Salaried sales associates and tied agents together account for just under one-quarter of life and capital redemption premium income 30

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