The low yield of the booklet this year has greatly contributed to the increase in premiums in life insurance contracts, but the sharp competition between insurance companies do not allow them to promise a level of profitability very high, especially as the French were stung by the vagaries of the stock market, are turning in large majority to the euro fund less profitable but more secure.
The financial crisis of 2008 had consequences in other significant withdrawal of capital from life insurance contracts. With the lower rate of pay A booklet which rose 4.00% in August 2008 to 1.25% on 1 August, the renewed interest in life insurance is significant. As the Livret A, the other regulated booklets followed the same curve, and between LEE (booklet corporate savings) and ELP (housing savings plans), the rates range between 0.75% and 2.50%. It is the Bank of France which sets the rates regulated booklets by calculating an arithmetic mean of the monthly average of Euribor 3 months and the rate of inflation. Now that the Euribor has fallen sharply since the backup plan for European banks fell below the bar of 1% since last October, as inflation declined since July 2008, the rate has been negative since May 2009 . It goes back to 1954 to find a full year with negative inflation. At 1.25%, the booklet A remains mathematically profitable, but unconsciously his rate is not engaging.
In one year, premiums for life insurance gained 10%, without reaching the record level of 2007. The contracts on euro fund are privileged compared to unit of account invested in shares on stock markets. The capital guarantee and the index are maximum security force of contracts in euros, but the investments are less profitable. The unit-linked contracts represent only 12.6% of total contributions.
Insurance companies are trying in vain to engage their customers to such contracts, more lucrative for them compared to euro contracts governed by fixed-rate interest rates relatively low long. For all insurance companies continue to pay returns honorable by cutting their margins to wrest market share in this highly competitive sector. In 2008, the average yield was around 4% less efficient than the 2007 revolved around 4.30%. This year the average is expected to reach 3.70%.
The financial crisis of 2008 had consequences in other significant withdrawal of capital from life insurance contracts. With the lower rate of pay A booklet which rose 4.00% in August 2008 to 1.25% on 1 August, the renewed interest in life insurance is significant. As the Livret A, the other regulated booklets followed the same curve, and between LEE (booklet corporate savings) and ELP (housing savings plans), the rates range between 0.75% and 2.50%. It is the Bank of France which sets the rates regulated booklets by calculating an arithmetic mean of the monthly average of Euribor 3 months and the rate of inflation. Now that the Euribor has fallen sharply since the backup plan for European banks fell below the bar of 1% since last October, as inflation declined since July 2008, the rate has been negative since May 2009 . It goes back to 1954 to find a full year with negative inflation. At 1.25%, the booklet A remains mathematically profitable, but unconsciously his rate is not engaging.
In one year, premiums for life insurance gained 10%, without reaching the record level of 2007. The contracts on euro fund are privileged compared to unit of account invested in shares on stock markets. The capital guarantee and the index are maximum security force of contracts in euros, but the investments are less profitable. The unit-linked contracts represent only 12.6% of total contributions.
Insurance companies are trying in vain to engage their customers to such contracts, more lucrative for them compared to euro contracts governed by fixed-rate interest rates relatively low long. For all insurance companies continue to pay returns honorable by cutting their margins to wrest market share in this highly competitive sector. In 2008, the average yield was around 4% less efficient than the 2007 revolved around 4.30%. This year the average is expected to reach 3.70%.
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