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Main determinants of profit sharing policy in the French life insurance industry

Author

Listed:
  • F. Borel-Mathurin
  • P.-E. Darpeix
  • Q. Guibert
  • S. Loisel

Abstract

We use a brand new data-set built from French supervisory reports to investigate the drivers of the participation rates (equivalent to annual yields) served on euro-denominated life-insurance contracts over the period 1999-2013. Our analysis confirms practitioners’ insight on the alignment with the 10-year French government bond and we analyze the departure of the participation rates away from this reference. Our data indicate that financial margins are more strictly targeted than participation. We find evidence that surrenders are fairly uncorrelated with participation, suggesting that other levers are used to monitor them. If higher asset returns can imply better yield for policyholders, riskier portfolios do not necessarily translate into better participation.

Suggested Citation

  • F. Borel-Mathurin & P.-E. Darpeix & Q. Guibert & S. Loisel, 2015. "Main determinants of profit sharing policy in the French life insurance industry," Débats économiques et financiers 17, Banque de France.
    • Handle: RePEc:bfr:decfin:17
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    Cited by:

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    3. Cyril Pouvelle., 2022. "An Analysis of Financial Conglomerate Resilience: A Perspective on bancassurance in France [Une analyse de la résilience des conglomérats financiers : Une perspective sur la bancassurance en France," Débats économiques et financiers 39, Banque de France.
    4. Bravo, Jorge Miguel & El Mekkaoui de Freitas, Najat, 2018. "Valuation of longevity-linked life annuities," Insurance: Mathematics and Economics, Elsevier, vol. 78(C), pages 212-229.
    5. Chen, Shi & Zhao, Yonghong & Huang, Fu-Wei & Wang, Bin & Lin, Jyh-Horng, 2024. "Carbon leakage perspective: Unveiling policy dilemmas in emission trading and carbon tariffs under insurer green finance," Energy Economics, Elsevier, vol. 130(C).
    6. Aur'elien Alfonsi & Adel Cherchali & Jose Arturo Infante Acevedo, 2019. "A full and synthetic model for Asset-Liability Management in life insurance, and analysis of the SCR with the standard formula," Papers 1908.00811, arXiv.org.
    7. Aurélien Violon & Dominique Durant & Oana Toader, 2018. "The Impact of the Identification of GSIBs on their Business Model," Débats économiques et financiers 33, Banque de France.
    8. Eric Monnet, & Angelo Riva, & Stefano Ungaro., 2021. "The Real Effects of Bank Runs. Evidence from the French Great Depression (1930-1931) [Les effets réels des ruées bancaires : l’exemple de la Grande Dépression en France (1930-1931)]," Débats économiques et financiers 37, Banque de France.
    9. J. Hombert & V. Lyonnet, 2017. "Intergenerational Risk Sharing in Life Insurance: Evidence from France," Débats économiques et financiers 30, Banque de France.
    10. Berdin, Elia & Pancaro, Cosimo & Kok Sørensen, Christoffer, 2016. "A stochastic forward-looking model to assess the profitability and solvency of European insurers," SAFE Working Paper Series 137, Leibniz Institute for Financial Research SAFE, revised 2016.
    11. B. Camara & F.-D. Castellani & H. Fraisse & L. Frey & C. Héam & L. Labonne & V. Martin, 2015. "MERCURE : A Macroprudential Stress Testing Model developed at the ACPR," Débats économiques et financiers 19, Banque de France.
    12. Srbinoski Bojan & Strozzi Fernanda & Poposki Klime & Born Patricia H., 2020. "Trends in Life Insurance Demand and Lapse Literature," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 14(2), pages 1-46, July.

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    More about this item

    Keywords

    participation rate; taux de revalorisation; profit sharing policy; life insurance; panel data; regulatory database.;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E49 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Other

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