Every year, the noose tightens a little more on unnecessary insurance.
Affinity contracts and their clauses full of exclusions are therefore regularly in the spotlight, particularly during the publication of the annual reports of the Insurance Mediator.
But affinity is not the only sector in the crosshairs.
After having expressed serious doubts about long-term care insurance in 2023, the Prudential Control and Resolution Authority (ACPR) chose to strike hard on life accident guarantee contracts (GAV), during its annual morning dedicated for the protection of banking and insurance customers on March 6.
GAV covers everyday bodily accidents resulting in injuries or even death.
A subject far from being negligible, since 30 million of these contracts equip the French.
Useless contracts with age
Already, points out the ACPR, these contracts are very heterogeneous from one insurer to another and the guarantees can cover accidents at home or at the workplace, traffic accidents or medical accidents.
Another example of heterogeneity to monitor closely: the rate of permanent partial incapacity to trigger compensation varies depending on the contract, between 1, 5 or 10%.
According to the ACPR, the methods for calculating incapacity or determining its rate are difficult to understand.
Result: problems arise at the level of compensation, the primary source of dispute over GAV (18,000 claims per year).
Among certain actors, the rate of refusal of support is higher than 80%!
The ACPR particularly criticizes the difficulties that arise from the age of 70 and denounces a
“strong alteration of the interest of the contract”
with the aging of the subscriber.
In fact, protections generally decrease or are simply eliminated from a pivotal age.
Example: reimbursement for permanent incapacity can be reduced by 80% from a certain age.
On the other hand, as with borrower insurance, exclusions may be due to the previous state of health of the insured.
Some contracts indeed require an exclusive causal link between the accident and the injury.
And the ACPR cites this refusal of compensation to a GAV client injured after a fall, on the grounds that he had undergone surgery on the same ankle 25 years earlier!
“These reasons for refusing coverage, of which the insured is not always aware when subscribing, raise questions about the interest of the contract for part of the target market
,” notes the Authority.
Imbalances between premiums collected and reimbursements paid
The ACPR calls for better consideration of customer interests and more rigorous monitoring of contracts through indicators such as the rate of refusal of coverage and the ratio of claims paid/premiums paid by customers.
The latter makes it possible to know the insurers' margin and to see if there is an imbalance between the premiums collected and the payments reimbursed.
Among insurance sectors, this ratio peaks at nearly 85% in home multi-risk, a sector where insurer margins are low and can fall to less than 20% in markets such as affinity insurance or credit insurance. to consumption.
It is rather close to 40% for GAV.
The ACPR refuses to establish a target ratio.
“However, we seek to identify contracts where the loss of value for the customer is high
,” indicates Grégoire Vuarlot, director of commercial practices control at the ACPR, criticizing during the conference
“contracts where over €10 in contributions , only €2, or even less, is used to compensate customers.”
“When a category of (insurance) policies is associated with very few claims, and the claims-to-premium ratio is very low, as observed for certain products, with rates of 5 to 20 %, we cannot avoid the question of the legitimacy of certain guarantees, in foresight, or in borrower insurance for short-term consumer loans.”
Jean-Paul Faugère, vice-president of the ACPR
" In for money "
To brandish this threat, the ACPR relies on the 2016 European insurance distribution directive and Value for money.
So called by the European institutions, this concept consists of knowing whether, by subscribing to a financial or insurance product, the customer is getting “value for money”.
In France, the ACPR first launched this paving stone into the pond of life insurance contracts, in order to question the interest of units of account whose returns may be low in relation to the fees charged.
From now on, the Authority intends to broaden the application of this concept to “non-life” insurance, namely all property and casualty insurance and even GAV.
In his introductory speech to the morning, ACPR Vice-President Jean-Paul Faugère recalled that in life insurance as in property insurance, the client's interests must remain at the center of concerns.
This interest, he insisted, must be verified
“throughout the life of the product, with objective indicators, such as the claims/premiums ratio, the complaint and termination rates, the rate of refusal to take. in charge… "
.
So far, the threat has not been followed up on.
But the ACPR could take action and put pressure on these contracts, as it did recently with affinity insurance, by prohibiting the marketing of Indexia (formerly Sfam) contracts.