Life insurance: should we fear a drop in return in 2025?

The guests of the “Great Savings Rendez-vous” (Capital / Radio Patrimoine), Alexis Trigaut, Partner, Vie and Retirement Commercial Director at Corum, and Stéphane Van Huffel, Director General of Netinvestment, analyze the prospects of funds in euros and the impact of the drop in rate on their yield.

Capital video: Should we fear a drop in return in 2025?

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The funds in euros – the guaranteed capital supports of life insurance contracts – experienced a renewed interest in 2024, after years of returns at half mast. But the drop in guiding rates started by the European Central Bank (ECB) could weigh on their future performance. Should we fear a return to disappointing yields this year? “Today, it is true that guiding interest rates drop, therefore, we can expect a drop in return for risk -free savings”recognizes Alexis Trigaut, Partner, Vie and Retirement Commercial Director within the Corum group,

However, our guest tempers this concern: “The Euros Fund is not made up only of rates sensitive products (such as states and large companies’ obligations, editor’s note). There is also a diversified part and insurers, whether historical or more recent, can seek other investments to maintain performance (real estate, shares, more risky obligations, etc.) ”

State bond rates remain high

What is more, even if the guiding rates are withdrawn, certain asset classes in euros continue to offer attractive yields. “Even if there have been reductions in guiding rates, we see that there are also rates that remain as high as 18 months ago”underlines Alexis Trigaut. This is notably the case obligations issued by the French State by 10 years, which display levels similar to their return at the end of 2023 (around 3.5%). “The horizon is therefore still very good to maintain performance if you have management that adapts to the current rate of rates and if, in addition, we will seek diversification“Explains our expert.

This without counting that the performance displayed by the Euros funds is slowly evolving from year to year, explains Stéphane Van Huffel, CEO of Netinvestment: “2.6 % in 2023 on average against 2.5 % in 2024: we see that the average yields are almost stable on euros funds, while the booklet A, it, fell more suddenly by 0.6 % on February 1. For the moment, the Euros funds have not yet suffered the impact of the drop in rates. As there is inertia for when they go upwards, there is also a delay when they drop. ” Finally, our wealth management expert recalls that beyond euros funds, it is also possible to seek performance by investing in more risky supports, such as account units (UC): “Our role is to put a proportion of euros to protect the life insurance contract, and the performance, we will rather look for it on the units of account according to the customer’s profile.”

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