Investments : is it still necessary to opt for the life insurance ?

While the fund performance in euros to be eroded, and that the units of account that are going through turmoil, what future for the life insurance ?

With the crisis of the sars coronavirus, the preferred investment of the French, has experienced a slump. In march and April, investors have sharply reduced their insurance premiums-life, while withdrawals and capital for death are paid by the insurers increased... Result of 4.3 billion euros are out of stock of life insurance in two months, the worst score since the end of 2011, in the midst of a crisis of the euro. What wonder about its future. Should or should not retain contracts, or even go there if it has not yet taken the plunge ?

In practice, the main obstacle to the subscriptions has not been the unwillingness of the customers, but the closure of the agencies. "Life insurance has been the victim of confinement, writes Philippe Crevel, director of Circle of savings. Investors have not been able to meet with their insurer or banker as of 17 march, which limited the number of operations." A windfall for intermediaries on the Internet. In Placement-direct.fr, a subsidiary of Swiss Life, sales online have been multiplied by three since mid-march. While 61% of investors were already comfortable with the consultation and the management of their savings in line before the crisis, 12% have understood that it was essential to be able to view and manage their investments at a distance during the confinement, while 8% took the opportunity to get acquainted with this new method of management, according to a survey conducted in April by Kantar for mes-placements.fr, a competitor. Once the decision is taken to invest in life insurance, remains to choose how to allocate his savings.

The euro funds haven of serenity

First question, is it still necessary to build on the fund in euros ? Appreciated for their safety, they are backed by the general assets of insurers, largely invested in government bonds, whose yield fell below zero, to-0.4% at the beginning of march, as had been the case at the end of August last. In these conditions, the euro funds have reported that around 1.4% in 2019, according to estimates by the analysis firm Facts & Figures, and they are diving again, around 1 to 1.2% in 2020.

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However, they remain strong, because the insurers have taken the lead. Given their diversification in corporate bonds, real estate, or even in shares, investments in which are backed by the euro funds still report more than 2% per year. A portion of profits is set aside each year by the insurers, to smooth out the performance in case of difficulties. These reserves represent 4.3% of the savings invested in euro funds, enough to support them for some time. It is a pledge of serenity against the risks of bankruptcy.

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"We heard a lot that the funds in euros not safeguarded them more purchasing power in the face of inflation, but during this crisis they have demonstrated their solidity and liquidity. Customers who need money can have on their account quickly," says Antoine Delon, president of the online broker Linxea. Indeed, it is possible to get his money back at any time to fill a lack of cash. "Life insurance is a long-term investment, if you need it in the short term, it is better to pull cash out of its funds in euros that come out of units of account against the current," advises nevertheless Stellane Cohen, director-general of the broker Altaprofits.

Fund security without competition

Despite rates today are very low, no risk-free investment is not in competition with life insurance. "The yield decline is everywhere, the booklet Was full so he doesn't earn more than 0.5% since February, and the first investment in waiting of the French is their current account, which is not paid," recalls Eric Girault, who is the founder of the broker mes-placements.fr.

This is not a reason not to be vigilant. Because the gap is widening between the contracts. The best funds in euros have been reported to be between 1.8 and 2% last year, compared to less than 1% for the poor, including those proposed in the banking networks. So you need to be mobile, even to open new contracts, for example, at the mutual insurance companies or online brokers. These latest offer from euro funds that have reported more than 2 % in the past year, in particular, in contracts covered by Spirica (Credit agricole) or Suravenir (Credit mutuel Arkea), provided that they contain a certain amount of diversification.

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Second question, is it still necessary to diversify its contract in units of account, or CPU, that is to say, outside of the fund in euros ? These CPU cover large pallets of investments, such as real estate and stock market funds. Many have lost between 10% and 20% with the crisis. Yet, investors have retained confidence in these products. The more opportunistic have benefited from their decline to invest at a discount. In the first quarter, the insured has placed 36% of their new payments on these media, and still 33% in April, against 27% on average in 2019, and 7% at the lowest end of the banking crisis of 2009. In the long term, invest in units of account remains a relevant solution to bring the fruits of his savings, especially when one of the subscribed to levelx attractive, such as last march.

Availability and taxation attractive

"The current crisis will increase the rate of savings," said Eric Baron, ceo of Swiss Life France. However, life insurance is the investment the most versatile by default, you can do the same in the same envelope with a tax structure that remains favorable." Unlike other investments, it is the only to trade without taxes, between the security of the funds in euros and units of account.

Still have to take the good options. Among the trends to follow, management under mandate, meeting a growing success. Investors - rather than to choose themselves, from among hundreds of investment funds - rely on a manager who pilot their investments according to their risk profile and their investment horizon. "For Boursorama, the management mandates, balanced and dynamic, managed by Edmond de Rothschild are subscribed to by a majority of customers", says Xavier Prin, director of marketing of the bank online. A way to simplify the savings with respectable performances.

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Since their inception in November 2009, these warrants, which were gains of +32 and +72% at the end of April 2020, and this in spite of the declines, respectively, -9, and -14% in the first four months of the year. These mandates are available from 300 euros and can be the subject of the scheduled payments from € 50 per month.

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insurers and banks also strive to promote the regular investment. By placing the same amount each month, it reduces the risk of loss, because it buys more in the lows and a little less when the Stock is at the top. "A lot of customers have taken advantage of the crisis to put in place of the scheduled payments," observes Anthony Delon. In Linxea, the amounts of these investments automated have increased by 25% since march. A sign that the followers of the life insurance still believe in its future.