As Christmas presents go, it was a superb one.
On 24 December 2019, France signed into legislation a measure that might enable life insurers to depend 70% of their profit-sharing provision in the direction of their solvency.
On the stroke of a pen, some €37bn ($44bn) of surplus funds had been created, in accordance with evaluation of 33 corporations by Insurance coverage Danger Knowledge, the database arm of InsuranceERM.
The impact on the French insurers’ solvency ratios was large. On common, it boosted their ratios by virtually 45 share factors – with one agency, GMT Vie, having fun with a 156 percentage-point enhance.
The most important corporations benefitted essentially the most. Greater than €10bn was added to Crédit Agricole’s group personal funds, from its subsidiaries Predica and Spirica.
For every agency, the provision pour participations aux excédents (PPE) represented 17% of personal funds on the 2019 year-end, on common. For a handful of corporations, it was nearer 30%.
As we reported final 12 months, the choice was not with out controversy. The profit-sharing provision exists to easy policyholder returns, not present funds that might bail out an insurer in monetary bother. Alternatively, it brings the French into alignment with practices within the UK and Germany.
With the legislation being signed so near the 2019 year-end, the PPE’s affect on the solvency of insurers was not essential. All of the corporations analysed would have been solvent with out the PPE’s contribution. However in 2020, administration will have the ability to take actions to release different surpluses, and the contribution of the PPE may turn out to be very vital.
Ship me your ideas and feedback at [email protected]
Desk 1: The impact of PPE on personal funds and solvency ratios (€ million)
| Firm | Personal funds | PPE profit | Share of personal funds made up of PPE | Solvency capital requirement (SCR) | SCR ratio (with PPE) | SCR ratio (with out PPE) | Share level distinction in SCR ratios |
|---|---|---|---|---|---|---|---|
| AG2R La Mondiale | 13,416 | 2,250 | 16.8% | 6,080 | 221% | 184% | 37% |
| Ageas France | 366 | 28 | 7.7% | 200 | 184% | 169% | 14% |
| Allianz Vie | 6,170 | 972 | 15.8% | 3,085 | 200% | 168% | 32% |
| APICIL Epargne | 575 | 29 | 5.0% | 225 | 256% | 243% | 13% |
| Areas Vie* | 189 | 24 | 12.7% | 90 | 209% | 182% | 27% |
| Assurances du Credit score Mutuel (ACM) Vie | 10,427 | 3,234 | 31.0% | 3,407 | 306% | 211% | 95% |
| Aviva Epargne Retraite | 1,550 | 56 | 3.6% | 695 | 223% | 215% | 8% |
| AXA Assurance Vie Mutuelle | 2,238 | 46 | 2.1% | 852 | 263% | 257% | 5% |
| AXA France Vie | 9,348 | 408 | 4.4% | 5,851 | 160% | 153% | 7% |
| CARAC° | 1,467 | 296 | 20.2% | 666 | 220% | 176% | 44% |
| Credit score Agricole (Predica & Spirica) | 34,561 | 10,026 | 29.0% | 13,157 | 263% | 186% | 76% |
| France Mutualiste | 1,276 | 134 | 10.5% | 597 | 214% | 191% | 22% |
| Generali Vie S.A | 8,791 | 874 | 9.9% | 3,804 | 231% | 208% | 23% |
| Era Vie | 142 | 15 | 10.6% | 91 | 156% | 140% | 16% |
| GMF Vie | 2,986 | 832 | 27.9% | 533 | 560% | 404% | 156% |
| Groupe le Conservateur* | 388 | 53 | 13.6% | 175 | 222% | 191% | 30% |
| HSBC Assurances Vie | 1,963 | 596 | 30.4% | 788 | 249% | 174% | 76% |
| La Securite Familiale | 48 | 5 | 10.5% | 15 | 315% | 282% | 33% |
| MAAF Vie | 1,533 | 323 | 21.1% | 328 | 467% | 369% | 98% |
| MACSF | 3,759 | 682 | 18.2% | 1,536 | 245% | 200% | 44% |
| MAIF Vie | 951 | 270 | 28.4% | 406 | 234% | 168% | 66% |
| Matmut | 2,303 | 44 | 1.9% | 1,115 | 207% | 203% | 4% |
| MIF | 635 | 77 | 12.1% | 241 | 263% | 232% | 32% |
| Milleis Vie | 356 | 111 | 31.1% | 169 | 211% | 145% | 66% |
| MMA VIE | 2,878 | 677 | 23.5% | 726 | 396% | 303% | 93% |
| Neuflize Vie | 626 | 127 | 20.3% | 423 | 148% | 118% | 30% |
| Oradéa Vie | 142 | 22 | 15.5% | 97 | 146% | 124% | 23% |
| Prevoir Vie | 948 | 88 | 9.3% | 315 | 301% | 273% | 28% |
| SAF BTP Vie | 515 | 50 | 9.7% | 175 | 294% | 266% | 28% |
| Swiss Life Assurance et Patrimoine* | 2,212 | 360 | 16.3% | 1,297 | 171% | 143% | 28% |
| Unofi Assurances | 733 | 260 | 35.4% | 271 | 270% | 174% | 96% |
| TOTAL | 113,490 | 22,969 | |||||
| AVERAGE | 16.3% | 43.6 |
Supply: Firm SFCRs analysed by Insurance coverage Danger Knowledge. Notes: * PPE estimated from change in solvency ratios; ° CARAC included an estimate for the impact of PPE by itself funds and solvency, however didn’t report this as its precise solvency situation
Insurance coverage Danger Knowledge
The desk above was produced with knowledge gathered from solvency and monetary situation stories (SFCRs) collated by Insurance coverage Danger Knowledge and analysed by Cherise Veerasawmy and Christopher Cundy.
Insurance coverage Danger Knowledge combines European insurers’ monetary and regulatory filings, together with the Solvency II SFCR disclosures, right into a single, complete and user-friendly database. It’s supreme for market/peer/prospect evaluation, analysis and benchmarking.
To seek out out extra about Insurance coverage Danger Knowledge, please e mail [email protected]
