Exponential growth in unit-linked (UC) investments and rapid development of retirement savings plans (PER) were observed during the first quarter of this year.
This is partly due to the growing share that unit-linked collection represents in contributions.
Record Figures
Contributions amounted to 77 billion euros in the first half, of which more than 19.3 billion euros came from net unit-linked collection.
In June, out of 13.7 billion euros in contributions, 3.4 billion came from unit-linked collection.
This unit-linked collection trend is gradually narrowing the gap between unit-linked collection and euro fund collection.
Impact on the Productive Economy
Greater net unit-linked collection allows insurers to invest more in assets that support the productive economy, due to the long-term nature of this savings, which means there will be more investors in the market, or larger investments by insurers.
Life insurance is therefore an increasingly profitable sector given the increase in its benefits: total benefits paid to savers in June 2021 amounted to 12.3 billion euros, more than 2 billion more than in the two previous years (10.3 billion in 2020 and 10.1 billion in 2019).
New Challenges for Managers
All of these factors, combined with savers’ growing desire to diversify their life insurance to improve return expectations, require increasingly rigorous risk management.
Euro funds, primarily invested in government bonds, have progressively declined in profitability. Interest in unit-linked products has therefore increased alongside their share in contribution collections, which confronts fund managers with a new challenge: clearly explaining the risks of unit-linked products to savers.
This is why new digital tools are being implemented to support and help independent financial advisors (IFAs) better understand the situation of the funds their clients are interested in.
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Past performance does not guarantee future results. The content above does not constitute investment advice. It is an objective analysis of financial information.