Financial assets of insurance corporations - France 2020Q1

Market downturn weighs on insurers' financial investments in the first quarter of 2020

At end-March 2020, French insurers' financial holdings reach €2,588 billion, down €115 billion compared to the end of 2019 due to the sharp fall in assets valuation (- €129 billion).

Non-money market fund shares (- €65 billion, of which - €55 billion in equity and mixed funds) and listed shares (- €22 billion) record the largest valuation declines, in connection with the downturn in equity markets at the end of the quarter. The valuation of long-term debt securities diminishes as well (- €39 billion) due to the impact of higher risk premiums.

In the first quarter, insurers seasonally reinforce their liquid investments (+ €16 billion) in money market funds (+ €11 billion) and deposits (+ €5 billion). They also increase their net holdings of non-money market funds (+ €4 billion), mainly real estate funds (+ €3 billion) and equity funds (+ €3 billion). Besides, they are net sellers of debt securities (- €9 billion), in particular those issued by financial corporations. Net investments in securities benefit resident issuers (+ €8 billion) at the expense of non-residents (- €3 billion).
Transactions of financial portfolio assets1 of insurance corporations (in billions of euros)
By category of issuers (2)
By geographical area
1. Debt securities, equities and investment fund shares
2. The unallocated of the graph by category of issuers corresponds to bonds and equities issued outside the euro area.
Financial assets of insurance corporations - 1st quarter 2020
(EUR billion, outstanding amounts at market prices at end of period, variations, transactions, valuation effects during period)
Life and composite IC Non-Life IC Total IC
Flows Valuation effect Stocks Net flows Valuation effect Stocks Net flows Valuation effect Stocks
Currency and depositis 2.2 0.0 35 2.7 0.0 16 4.9 0.0 51
Debt securities
< ou= 1 year (original maturity) -1.8 0.0 13 0.2 0.0 1 -1.6 0.0 13
> ou= 1 year (original maturity) -6.4 -35.9 1,439 -1.1 -2.9 110 -7.5 -38.9 1,548
Loans 1.4 0.0 47 -0.7 0.0 9 0.7 0.0 55
Equity
Listed shares -2.3 -17.9 58 0.5 -4.2 11 -1.8 -22.1 69
Unlisted shares 0.8 -0.1 61 0.2 -2.1 28 1.0 -2.1 88
Others shares 0.0 0.4 23 0.0 -1.4 25 0.0 -1.0 49
Investment
Money market funds 10.7 -0.1 88 0.5 0.0 8 11.2 -0.1 96
Non money market funds 3.8 -62.7 574 0.0 -2.1 35 3.8 -64.8 609
Financial derivatives 3.5 8 0.1 0 3.6 8
Total 11.9 -116.4 2,346 2.4 -12.6 242 14.3 -129.0 2,588

Financial portfolio assets by type of assets
After the implementation of a look-through approach3, debt securities account for 73% of insurers' portfolio, equities represent 14% and the remaining 13% is made up of mutual fund shares.

47% of the portfolio is invested in assets issued by residents, 40% in assets issued by non-residents and 13% in unallocated mutual fund shares.

Investments finance mainly general government (31%), non-financial corporations (22%), banks and other monetary financial institutions MFIs (16%), and financial corporations (18%).

Financial portfolio assets by geographical area
Financial portfolio assets by issuers
3. The look-through approach consists, when the information is available, in replacing the resident mutual funds shares in the insurance portfolios by the final investments of mutual funds. The 13% residual amount correspond to these mutual funds shares (mainly non-resident) which cannot be allocated with this approach. After a look-through approach, the share of equities increases by +6 basis points (8% to 14%) and the one of debt securities by +13 basis points (60% to 73%).
Date of next publication: 9th October 2020
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STAT INFO - 1st quarter 2020
Financial assets of insurance corporations

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Financial assets of insurance corporations - France
  • Published on 07/10/2020
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Published on Friday, July 10, 2020