The remuneration of funds in euros fell further in 2020. But the decline could have been even more marked.
Because, since last year, under the effect of the health crisis, interest rates are again close to 0%, or even downright negative.
The ten-year French government bond, the OAT, traded at -0.30% on Wednesday!
However, nearly 80% of funds denominated in euros are invested in bonds, of which about half in government bonds.
This therefore poses a problem for life insurers, who are forced to invest newly collected savings as well as the product of high-yield bonds maturing in securities with little or no interest.
This investment strategy lowers the return on euro funds and is expensive.
"The capital of these funds being guaranteed, insurers lose money if they invest in bonds that earn nothing or at negative rates"
, explains Jean-Claude Seys, president of the French Insurance Development Association.
This article is for subscribers only.
You still have 76% to discover.
Subscribe: 1 € the first month
Can be canceled at any time
I ENJOY IT
Already subscribed?
Log in
