The credit insurance market - France (2024)

1.2 Global market

The size of the global financial protection market was valued at $**,***.** million in **** and is expected to reach $**,***.** million by ****, at a CAGR of *.*% from **** to ****.

The financial protection market includes protection of payments and protection of mortgage payments (***).

Our market segment thus constitutes a fraction of the financial protection market, but it is important to note that this sector is expected to post stable growth of around *% over the study period.

Worldwide market Source: ****

1.3 The domestic market: Significant growth in the loan insurance market

the national creditor insurance market is estimated at **.** billion euros in ****, up *.**% in * year. Between **** and ****, the market grew by **. *%, representing average annual growth of *.**% over the period.

Total premiums on creditor insurance contracts France, ****-****, Million € Source: France Assureurs The market is segmented according to contract type: Death benefit contracts, which represent **% of the market by value Disability contracts: **% of market share Loss-of-work contracts, which account for just *% of the sector's market share.

Breakdown by purpose in value of loan insurance premiums France, **** Source: ****

The national market for creditor insurance death benefits is estimated at *.* billion euros in ****, up *.**% over * year. Between **** and ****, the market grew by **.**%, representing average annual growth of *. *% over the period. In ****, growth in this market segment will slow considerably.

Premiums for death cover under creditor insurance contracts France, ****-**** Source: ****

the national market for disability cover in creditor insurance is estimated at €*.* billion in ****, up **.**% over * year. Between **** and ****, the market grew by **.**%, representing average annual growth of *.**% over the period.

con the national market for loss-of-job guarantees in creditor insurance is estimated at *** million euros in ****, up **% over * year. Between **** and ****, the market grew by *.**%, representing average annual growth of *.**% over the period. Between ...

2.1 Increasingly well-insured French people

Percentage of borrowers covered by borrower's insurance France, **** - ****, % (***) Source: ****

The proportion of borrowers covered by borrower's insurance has risen steadily in recent years. Indeed, the proportion of borrowers insured for disability and death has risen by almost ** percentage points between **** and ****, to **.*% and **.*% respectively. The proportion of borrowers insured for loss of employment remained virtually unchanged between **** and ****, at *.*% in ****.

2.2 Home loan production in France

The loan insurance market is closely linked to the vitality of the real estate sector, and in particular to trends in the number of loans granted and the size of these loans.

In ****, contributions linked to mortgages will account for **% of total contributions, whereas in ****, they represented **% of total contributions. This decline in market share is explained by the more significant percentage increase in contributions linked to consumer and professional loans.

However, it is clear that the real estate sector remains in good health , accounting for over */* of the sector's premiums .

Breakdown of premiums by loan type

Number of loans granted by banks

Bank rates have a direct influence on the number of loans granted by banks. This number of loans, in turn, has a direct impact on real estate agency revenues, as they are closely linked to the number of real estate transactions carried out. Since ****, we have seen a steady decline in the number of loans granted. Between July **** and June ****, the number of bank loans granted fell by almost **%.

Number of bank loans granted (***), Year-on-year levels France, ****-June-**, Base *** December **** Source: ****

The average monthly volume of home loans granted to individuals rose between **** and ****, following a sharp fall ...

2.3 Applying for consumer credit

The creditor insurance market depends on the consumer credit market to the tune of around **%. Here too, premiums are based directly on outstanding loans, and follow their overall trend (***).

In ****, the rate of credit held by households stood at **.*%, the lowest level the Observatoire des Crédits aux Ménages has seen since the late ****s. Indeed, this seems to be a trend that has been evident in recent years and looks set to persist in ****, mainly due to rising interest rates.

Home loan and consumer credit ownership rates France, ****-****, in percent Source: ****

if we look separately at mortgage and consumer loan rates, we seetwo completely opposite trends: the rate for mortgages has remained high,despite the health crisis and the war in Ukraine, with **.*% of households holding mortgages in ****, and **.*% were in the process of buying their principal residence, among the highest levels seen since the early ****s.

Demand for consumer credit, meanwhile, has suffered a setback since the health crisis, and will continue to do so in **** and ****. In ****, the sector will suffer first and foremost from "usury rates rising too slowly in relation to refinancing costs" for credit institutions.

Intentions to take out new loans in the ...

2.4 Borrower profile

The profile of a French property borrower

The meilleurtaux.com study also reveals that the average first-time buyer has taken out a mortgage worth around ***,*** euros since last January

At national level, the average deposit required to obtain a mortgage is **,*** euros in ****, and the median deposit is **,*** euros. But these figures vary widely from region to region. The reason is simple: prices, too, differ considerably.

More precisely, by region, this gives :

Profile of property borrowers by regionFrance, June ****

Source: ****

There are many disparities between regions: in Île-de-France, the average borrower is wealthier, with a salary almost **% higher than the national average, for a down payment doubled, and a loan value **% higher than the national average. On the other hand, we find regions like Bourgogne-Franche-Comté, where the average salary is ****€, allowing an average down payment of **,***€, and loans were ***,*** on average for first-time buyers.

With rising interest rates and fewer loans being granted, the amount of downpayments has risen sharply in **** and the first half of ****.

For households

In ****, the rate at which households held loans stood at **.*%, the lowest level recorded by the Observatoire des Crédits aux Ménages since the late ****s. Indeed, this seems to be a ...

3.1 A highly concentrated market dominated by bancassurance operators

the loan insurance market is largely dominated by bancassurance, which will capture nearly **% of market share in ****.

As a reminder: bancassurance is a financial institution that offers both traditional banking services such as savings accounts and loans, and insurance products including life, home and car insurance policies. It gives customers access to a complete range of financial services from a single source, offering convenience and product diversification.

Market share of bancassurance in the loan insurance market France, ****, % Source: ****

The three market leaders in creditor insurance (***) have a market share of **%, equivalent to gross premiums of *.* billion euros in ****, out of a total market of **.* billion euros.

Market share of the * main players in the loan insurance market France, ****, % Source: ****

3.2 An increasingly risk-free market

Doubtful loans are loans or receivables for which there is a high risk of non-repayment due to the uncertain creditworthiness of the borrowers. They represent financial assets with the potential to cause significant losses for lenders or financial institutions. Prudent management of doubtful loans is essential to minimize financial risks.

In France, since ****, the proportion of doubtful outstandings has been steadily decreasing, falling to less than *% of total outstandings by ****.

Gross doubtful outstandings on housing loans granted in France, in billions of euros and as a % of total outstandings France, ****-**** Source: ****

When we focus on the evolution of gross doubtful loan rates by object, we notice : Other loans have seen the biggest reduction, with a drop of around **% between **** and ****, followed by loans for the purchase of main residences and rental investments. Only the acquisition of external loans has increased over this period, from *.**% to *.**%. This reduction in risk is the result of new rules governing personal indebtedness, capped at **% . Rate of gross doubtful loans by object France, **** - ****, in percent Source: ****

3.3 The impact of the Lemoine law on the sector

*.The "right to forget

This allows borrowers not to disclose their medical history to their insurer once their medical treatment has been completed.

Previously, the time required to benefit from this right was long and complex, making it difficult for insurers to agree. With the Loi Lemoine, these time limits have been reduced to * years for former patients, regardless of age or loan amount, and this also applies to former cases of hepatitis C.

*.Disappearance of the health questionnaire

as of June *, ****, insurers are prohibited by law from requiring a health questionnaire from borrowers under ** when the sum insured does not exceed ***,*** euros. This measure aims to offer equal access to loan insurance, regardless of the borrower's state of health, by eliminating excess premiums and exclusions of cover.

*.The Loi Lemoine introduces important provisions on borrower information.

banks and lending institutions must now inform their customers each year of their right to cancel the contract and of its expiry date. When providing a quote, insurers are now obliged to detail the cost of loan insurance over an *-year period.

*.Cancellation of loan insurance now possible at any time

The Lemoine law of February **, **** made it possible to change ...

3.4 Distribution of players in the sector

The absence of a specific NAF code for loan insurance is explained by the wide variety of players, such as insurance companies and financial institutions, which operate in numerous sectors and offer a diverse range of services.

We have therefore opted to use NAF code **.**Z, which includes players such as Axa, Generali and Allianz. However, it's important to note that this NAF code does not cover the three main players Crédit Agricole Assurance, Crédit Mutuel Assurance and CNP Assurance, as these are registered under * different NAF codes.

Since ****, the sector has seen a significant reduction in the number of establishments, with an average decline of around *.*% per year, equivalent to an average loss of *** establishments per year over this period. This trend is clearly highlighted in the [***] **** Report.

Number of establishments (***) France, ****-****, Number of establishments Source: ****

The insurance sector is one of the main providers of employment in France, accounting for around ***,*** workers. More specifically, the "Other insurance" sub-sector has maintained a relatively stable workforce level between **** and ****, with a slight decrease of *.*%. However, in ****, with business recovering from the COVID-** crisis, this sector recorded growth of *.*% over a two-year period, taking the number of employees to ...

3.5 How loan insurance works

Here's how the process of taking out any type of loan insurance generally works, and how reimbursement is handled in the event of a claim. It's important to note that while underwriting isn' t always compulsory, it does become a frequent occurrence, particularly with large-scale, long-term mortgages.

4.1 The different types of creditor insurance

TAEA (***) is the rate applied by loan insurers when taking out a mortgage. It enables you to understand what proportion of an annual loan is attributed to insurance.

To determine this rate, insurance companies and banks take a number of factors into account, including :

Your age Your professional situation The term of your mortgage Your state of health, generally assessed by means of a medical questionnaire (***).

It is essential to note that this rate has a significant impact on the total cost of your mortgage, and can represent more than **% of the effective cost of the loan.

Loan insurance rates fluctuate from year to year, but they are mainly determined by the borrower's profile, as we recently observed. For an individual contract offered by a broker, here are the rates applicable according to the borrower's age in **** [***]

For people aged ** to **, a rate of less than *.**% is available on the outstanding amount. Individuals aged ** to ** can expect an average rate of *.**%. People over ** will see their rate increase, reaching an average of *.**%.

Average mortgage insurance rates by profile France, ****, in Source: ****

Here's a summary of the various guarantees that can be included in loan insurance, along with detailed information on their ...

4.2 Effective annual insurance rate and increase in gross premiums

The TAEA, which stands for Taux Annuel Effectif d'Assurance, is an essential indicator of the proportion of the cost of borrower's insurance in relation to the total amount of your mortgage.

as of January *, ****, insurers are obliged to include the APR, details of cover and the cost of monthly payments in their loan offer. This new regulation aims to increase the transparency of the information provided to borrowers, making it easier for them to compare different offers. Formula: APR: APR with insurance - APR without insurance. Let's take an example to illustrate our point[***] : Here are the elements to consider for a home loan of ***,*** euros over a repayment period of ** years, with a nominal rate of *.**% : Monthly payment including loan insurance: *,*** euros Application fees: *** euros APR excluding insurance: *.** APR with insurance: *.** The APR is therefore *.**% (***).

APR (***)/loan amount] x total number of monthly payments

To simply calculate the total cost of insurance : Total capital borrowed x TAEA x loan term.

Policyholder contributions are therefore a function of the total capital borrowed, the APR and the term of the loan.

Average duration of mortgages :

Between the first quarter of **** and the second quarter of ****, the average repayment period for home loans ...

5.1 Regulations

The creditor insurance sector is subject to numerous regulations specific to insurers' activities:

The Contrat d'Assurance Terrestre (***) Act: This law governs terrestrial insurance contracts, including motor insurance, home insurance, and other insurance related to real estate or movable property in France.

Solvency II law: This European regulation, which came into force in ****, establishes solvency and risk management standards for insurance companies in Europe. It aims to guarantee the financial stability of the insurance sector and protect the interests of policyholders.

Since ****, successive texts have relaxed the conditions for cancelling insurance contracts. It is now possible for policyholders to cancel most insurance contracts at any time after the first year of subscription, free of charge or penalty. However, this does not apply to certain heavy provident and group contracts.

Here's how the laws governing the sector have evolved over time:

The Chatel law of **** marked a first step towards more flexible contract cancellation conditions, whether for insurance or services such as mobile contracts. It required insurers to inform their customers, at least two and a half months before the expiry date (***), of their option to cancel their contract on the expiry date.

The Hamon law, in force since January *, ****, represented a major ...

6.1 Player segmentation

• CNP Assurances (La Poste)
• Crédit Mutuel
• Axa groupe
• Maif France
• Generali
• CA Assurances
• Allianz