Financial assets of insurance corporations - France 2022Q3
Published on 6 January 2023
The valuation of securities held by insurers diminishes by 82 billion euros
At end-September 2022, financial assets of insurance corporations amount to €2,501 billion, down strongly by -€73 billion over the third quarter. The fall is explained by a strong negative revaluation of assets (- 82 billion) slightly attenuated by positive net investment flows (+ 9 billion).
The new rise in long-term rates (+ 76 basis points for the 10-year OAT in the third quarter of 2022) diminishes the valuation of long-term debt securities (- 63 billion). The decline in equity markets (- 3 % for the CAC 40 index in the third quarter) also diminishes the valuations of listed shares (- 4 billion). The degradation of the equity and bond markets also impacts the valuation of non-money market funds, which also falls (- 15 billion of which - 7 billion for equity funds and - 3 billion for bond funds).
Positive net investment flows result from a high level of net loan flows (+ 8 billion), notably intra-group loans in the amount of + 5 billion. They are also explained by net purchases of short-term debt securities (+ 6 billion) and by an increase in deposits (+ 6 billion). Net sales of securities (- 10 billion) are due to money market fund shares (- 13 billion) and to a lesser extent to long-term debt securities (- 7 billion).
The new rise in long-term rates (+ 76 basis points for the 10-year OAT in the third quarter of 2022) diminishes the valuation of long-term debt securities (- 63 billion). The decline in equity markets (- 3 % for the CAC 40 index in the third quarter) also diminishes the valuations of listed shares (- 4 billion). The degradation of the equity and bond markets also impacts the valuation of non-money market funds, which also falls (- 15 billion of which - 7 billion for equity funds and - 3 billion for bond funds).
Positive net investment flows result from a high level of net loan flows (+ 8 billion), notably intra-group loans in the amount of + 5 billion. They are also explained by net purchases of short-term debt securities (+ 6 billion) and by an increase in deposits (+ 6 billion). Net sales of securities (- 10 billion) are due to money market fund shares (- 13 billion) and to a lesser extent to long-term debt securities (- 7 billion).
Security portfolio transactions (1) of insurance corporations (in billions of euros)
By category of issuers (2)
By geographical area
1. Debt securities, equities and investment fund shares
2. "Unallocated" is composed of bonds and equities issued outside the euro area.
2. "Unallocated" is composed of bonds and equities issued outside the euro area.
Financial assets of insurance corporations - 3rd quarter 2022![]()
(EUR billion, outstanding amounts at market prices at end of period, transactions, valuation effects during period)
| Life and composite IC | Non-Life IC | Total IC | |||||||
| Net flows | Valuation effect | Stocks | Net flows | Valuation effect | Stocks | Net flows | Valuation effect | Stocks | |
| Currency and depositis | 5.2 | 0.0 | 44 | 0.7 | 0.0 | 15 | 5.9 | 0.0 | 60 |
| Debt securities | |||||||||
| < ou= 1 year (original maturity) | 5.8 | 0.0 | 25 | -0.1 | 0.0 | 2 | 5.7 | 0.0 | 26 |
| >1 year (original maturity) | -8.2 | -58.9 | 1,156 | 1.5 | -4.0 | 106 | -6.7 | -62.9 | 1,262 |
| Loans | 5.7 | 0.0 | 55 | 2.8 | 0.0 | 13 | 8.5 | 0.0 | 69 |
| Equity | |||||||||
| Listed shares | -0.1 | -4.2 | 67 | -0.1 | 0.0 | 13 | -0.2 | -4.3 | 80 |
| Unlisted shares | 1.9 | 0.3 | 67 | 0.6 | 0.0 | 37 | 2.5 | 0.3 | 104 |
| Others shares | -1.7 | -0.2 | 63 | 0.0 | 0.2 | 33 | -1.7 | 0.0 | 97 |
| Investment | |||||||||
| Money market funds | -9.8 | -0.2 | 75 | -2.8 | 0.0 | 8 | -12.7 | -0.2 | 82 |
| Non money market funds | 3.4 | -14.9 | 674 | 0.0 | -0.5 | 38 | 3.4 | -15.4 | 712 |
| Financial derivatives | 4.7 | 11 | 0.0 | 0 | 4.6 | 11 | |||
| Total | 6.8 | -78.1 | 2,237 | 2.5 | -4.4 | 265 | 9.3 | -82.5 | 2,501 |
Breakdown of outstanding amounts of security portfolio by type of securities
After the implementation of a look-through approach(3), debt securities account for 65% of insurers' portfolio, equities represent 19% and the remaining 16% is made up of mutual fund shares.
All instruments combined, 44% of the portfolio is invested in assets issued by residents, 40% in assets issued by non-residents and 16% in unallocated mutual fund shares.
Investments primarily finance the financial sector excluding investment funds (35%, i.e. 14% for monetary financial institutions and 21% for financial corporations), general government (25%) and non-financial corporations (24%).
All instruments combined, 44% of the portfolio is invested in assets issued by residents, 40% in assets issued by non-residents and 16% in unallocated mutual fund shares.
Investments primarily finance the financial sector excluding investment funds (35%, i.e. 14% for monetary financial institutions and 21% for financial corporations), general government (25%) and non-financial corporations (24%).
Breakdown of outstanding amounts of security portfolio by geographical area![]()
Breakdown of outstanding amounts of security portfolio by category of issuers![]()
3. The look-through approach consists, when the information is available, in replacing the French mutual funds shares in the insurance portfolios by the final investments of mutual funds. The 16% residual amount correspond to these mutual funds shares (mainly foreign) which cannot be allocated with this approach. After a look-through approach, the share of equities increases by +8 basis points (11% to 19%) and the one of debt securities by + 14 basis points (51% to 65%).
Date of next publication: 7th April 2023
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