Inflation, rising interest rates and the uncertainties created by the war in Ukraine, among others, are fueling financial market volatility. In this context, medium and long-term investments such as life insurance are doing better than others, provided, of course, that they adopt a more risk-taking management method.
During the first half of 2022, net inflows from real estate funds, such as OPCIs, SCIs and SCPIs, set a new record. This performance was achieved over a period marked by very strong economic tensions, between:
- Soaring energy prices;
- shortages of raw materials;
- Supply chain disruptions;
- Economic recovery slowed down by the war;
- The epidemic.
Above all, this feat recalls the interest of investments considered as safe havens in times of crisis. Life insurance could earn this status. But that depends on the strategies adopted by distributors and the choices made by savers.
Priority to diversification and real estate assets
The historic collection of real estate funds in the first half of the year is no coincidence. It proves their ability to overcome an unfavorable economic situation and secure savers’ money. Precisely, in addition to its qualities of tax life insurance, a multi-support contract is distinguished by its openness to a wide range of assets, including real estate values. To optimize life insurance returns in 2022,
Experts therefore recommend investing more in the real estate market, through SCIs, OPCIs and SCPIs integrated into unit-linked companies.
It should be noted, however, that the real estate underlyings do not serve the same yield. The choice of the real estate asset will then be decisive on the remuneration of the life insurance contract. Betting on real estate also requires a lot of patience, as this type of investment is more suited to a long-term horizon. In addition to real estate, other units of account can boost the yield of life insurance in 2022. Insurers are thus multiplying communications around little-known values, such as :
- Mining raw materials;
- Agricultural products ;
- Energy resources.
With the spike in prices caused by the war in Ukraine, looking for performance in these sectors can be profitable. These assets with unsuspected potential are open to holders of a life insurance contract through ETFs or exchange-traded funds included in the Unit-linked. Like any other UC, these assets present a risk of capital loss.
ImportantThey should only be used as part of a short-term diversification and optimization strategy, when market conditions permit.
Close attention to fees and funds in euros
Since July 1, insurers and managers must transparently display the fees on each unit of account. This new rule also concerns PER and capitalization contracts. This mandatory display will be extended in information documents from 1 January 2023.
For savers, a difference of a few basis points represents thousands of euros in savings over several years. Also, the analysts expect an effort from distributors on fees during the coming months. These changes could accentuate the arbitrage in favor of assets with lower fees. Finally, with the rise in interest rates, insurers anticipate a decline in investments in euro-denominated funds, for the benefit of UCs. Equity markets and index securities will be the big winners.