The washing machine from 2022 really shrunk the portfolio of insurance companies in France. At the end of 3. quarter of the past year, the outstanding financial investments of insurance companies amounted to 2,501 billion euros, which is a significant decrease of 73 billion compared to the previous quarter, according to statistics published by the Banque de France.France. The decrease is explained by a significant negative revaluation of assets of 82 billion euros, slightly mitigated by positive net investment flows of 9 billion.
Already during the first quarter, insurance companies had seen the valuation of their securities melt by more than 111 billion euros, then by 146 billion in the second quarter. At the end of 2021, the outstanding still reached 2.806 billion euros after increasing by 66 billion euros during the year. During the first nine months of 2022, the outstanding investments of insurance companies fell by 305 billion euros.
Most of the erosion in the third quarter of 2022 can be attributed to the further increase in long-term interest rates by 76 basis points on the 10-year OAT, which reduced the valuation of long-term debt securities by 63 billion euros. The fall in stock markets of 3% for the CAC 40 in the third quarter also reduced the valuation of listed shares by 4 billion euros. The deterioration of the stock and bond markets also had consequences for the valuation of non-monetary funds, which also fell: – 15 billion, of which 7 billion for equity funds and DKK 3 billion. for bond funds.
Weak positive currents
Positive net investment flows were due to a high level of net loan flows of DKK 8 billion. EUR, including intra-group loans of 5 billion EUR. They can also be explained by net purchases of short-term debt securities for DKK 6 billion. and with an increase in deposits of DKK 6 billion. Net sale of securities (-10 billion) is due to shares in monetary collective investment institutions (OPC) for 13 billion. and, to a lesser extent, long-term debt securities for DKK 7 billion.
After making French UCIs appear transparent, the insurers’ outstanding investments consist of 65% of the portfolio in debt securities, 19% in equities and 16% in UCI units.
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