The news surprised even professionals in the sector. Deputies and senators finally agreed on February 3 to allow holders of a mortgage to change loan insurance at any time, and no longer only during the first year or on the anniversary of the contract. A reversal of the situation which made the synthesis between the proposals of the two assemblies, the National Assembly pleading for a liberalization of the market. At the same time, the joint joint committee decided, as the Senate intended at first reading, to remove the medical questionnaire for loans of less than 200,000 euros and customers under 60 years of age. These floor thresholds make half of French borrowers eligible for the measure, recalled Senator Daniel Gremillet.
Completed when the contract is taken out, the formality of the medical questionnaire allows insurers to be notified if the client represents a major risk. The borrower is forced to declare the existence of a serious illness – cancer, AIDS, obesity, sclerosis – under penalty of exclusion of cover on the day of the request for coverage. A constraint which is accompanied by heavy surcharges. The vote of parliamentarians will therefore, as soon as it is promulgated in the Official Journal, benefit from similar tariffs for healthy people. Nearly 137,000 customers are directly affected by the reform, with an overall gain of more than 471 million euros, according to calculations by the broker Reassure me. But at what price for the rest of the borrowers though?
At some insurers, 70% of the customer portfolio is affected by the removal of the health questionnaire
The reform is based on the principle of pooling. Borrowers in good health assume, via their contributions, the additional premiums from which sick people are now exempt. “At some insurers, 70% of the client portfolio is affected by the removal of the health questionnaire, notes Astrid Cousin, spokesperson for the broker Magnolia. At home, the increase in prices could be significant and rapid. Customers who want to benefit from the best rates must therefore change insurance now.”
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Despite this threat, it is difficult for the moment to determine the extent of the increase. The tariff schedules soon published by the insurers will prevail. “Only insurers or brokers who excluded people in poor health will now have to include the cost of this risk in their rates, tackles the spokesperson of a mutual bank. French banks will not see their prices increase sharply because they are already integrating sick borrowers and strongly pooling risks.
Crédit Mutuel had paved the way
Contacted by Capital, Generali, one of the biggest players in the loan insurance market, confirms that the removal of the health questionnaire raises “many questions” with “a possible inflationary impact at stake” – including an increase tariffs – without being able to determine it precisely for the moment.
Already in November, Crédit Mutuel had paved the way in this area, by announcing, at no additional cost, the abolition of the medical questionnaire for its 150,000 most loyal customers. The establishment has thus given up more than 70 million euros in turnover from additional premiums. The bank also welcomed the vote of the parliamentarians: “We believe that solidarity must work for the sick and former sick. Yes, this will have an overall cost, but this will be largely absorbed by sharing between healthy people and others. This is also a question that we never ask ourselves in terms of complementary health, for example.”
Insurers will still have health data
The increase borne by borrowers should however remain moderate, especially since insurers “still have essential data to establish their tariff schedules and assess the risk of the client: age, profession and therefore socio-professional category”, recalls Michael Donio, director of the actuarial department of the consulting firm Sia Partners. Above all, he adds, the cost of risk for insurers will only be slightly increased: “Seriously ill people do not think so much about buying property but more about treating themselves. The share of anti-selection of these borrowers in all the loans granted is low. For these two reasons, the expert estimates that the likely increase in prices over the next few weeks will be moderate.
Some savings may even be made by insurers, believes Antoine Bellicha, managing director insurance at Sia Partners: “The removal of the questionnaire could lead to the optimization and generalization of 100% digital subscriptions, with customer acquisition costs. falling.”
Market liberalization should compensate for increases
The biggest source of gains for individuals, however, remains the possibility of terminating their loan insurance contract at any time. According to an estimate from Bercy, a first-time buyer who borrowed 250,000 euros at age 35 to acquire his main residence would earn nearly 4,000 euros over 25 years by putting his loan insurance in competition. Brokers are even more optimistic. Magnolia has thus calculated that 15,000 euros can be saved on average over the total duration of the loan, or 50 euros per month if the credit is made over 25 years.
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