Financial assets of insurance corporations – France 2020Q4

Published on 04/09/2021
36 billion euros increase in insurance investments in 2020
At end 2020, insurers' financial investments amount to €2,739 billion, up €36 billion over the year. This increase is the result of both a revaluation of asset prices (+€19 billion despite the market drop in the first quarter of 2020) and net investment flows (+€17 billion). These net investments are significantly in decline compared to 2019 (+€69 billion) as a consequence on one hand of the net outflow from life insurance and, on the other hand, of the significant sales of assets by some insurers that have opted for dedicated management of retirement savings through the creation of ORPS under French law (Organismes de Retraite Professionnelle Supplémentaire, -€20 billion in the 3rd and 4th quarters, cf. Stat Info of the Q3*).

The valuation of long-term debt securities (+€20 billion) rises in connection with the easing of long-term rates (- 46 basis points for the 10-year OAT in 2020). The valuation of non-money market funds (+€9 billion) is mainly attributable to equity funds (+€6 billion) and mixed funds (+€3 billion).

Insurers are mainly net buyers of non-money market funds shares (+€22 billion), in particular of equity funds (+€13 billion), of real estate funds (+€7 billion) and of other funds (+€7 billion), while they are net sellers of mixed funds (-€6 billion). They are also net buyers of short-term debt securities (+€10 billion). Net sales of securities consist mainly of long-term debt securities (-€25 billion) and general government securities (-€14 billion).

* Insurance corporation statistics will not finally be revised to integrate ORPS data: these will be disseminated at a later stage via dedicated statistical series and will be the subject of a statistical complement in the next Stat Info.

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 during 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 -1.8 0.0 31 0.4 0.0 13 -1.4 0.0 44
Debt securities
< ou= 1 year (original maturity) 5.7 0.0 20 4.6 0.0 5 10.3 0.0 25
> ou= 1 year (original maturity) -23.8 18.7 1,478 -1.5 1.1 114 -25.3 19.8 1,591
Loans 4.2 0.0 49 -0.5 0.0 9 3.7 0.0 58
Equity
Listed shares -0.5 -6.8 71 0.3 -1.9 13 -0.2 -8.7 84
Unlisted shares 3.4 -0.1 63 0.8 -1.1 29 4.2 -1.2 93
Others shares 1.6 -0.2 24 -0.3 0.1 26 1.3 -0.2 51
Investment
Money market funds 2.5 -0.3 83 -1.0 0.0 7 1.5 -0.3 90
Non money market funds 20.9 8.6 656 1.0 0.8 41 21.9 9.4 696
Financial derivatives 1.6 0.0 6 -0.1 0.0 0 1.5 0.0 6
Total 13.6 19.9 2,482 3.9 -1.0 257 17.5 18.9 2,739

Breakdown of outstanding amounts of financial portfolio assets by type of assets
After the implementation of a look-through approach3, debt securities account for 71% of insurers' portfolio, equities represent 16% and the remaining 13% is made up of mutual fund shares.

All instruments combined, 46% of the portfolio is invested in assets issued by residents, 41% in assets issued by non-residents and 13% in unallocated mutual fund shares.

Investments primarily finance the financial sector (34%, i.e. 16% for banks and other monetary financial institutions and 18% for financial corporations), general government (30%) and non-financial corporations (23%).

Breakdown of outstanding amounts of financial portfolio assets by geographical area
Breakdown of outstanding amounts of financial portfolio assets by category of 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 +8 basis points (8% to 16%) and the one of debt securities by +12 basis points (59% to 71%).
Date of next publication: 9th July 2021
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STAT INFO - 4th quarter 2020
Financial assets of insurance corporations

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Financial assets of insurance corporations - France
  • Published on 04/09/2021
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Published on Friday, April 9, 2021