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Long-term savings: the case of life insurance in France

Author

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  • Gollier, C.

Abstract

The life insurance market in France, which has captured EUR 1.5 trillion in savings, is now facing major challenges. While households that invest in this savings product mostly have very long-term investment horizons, insurance companies mainly invest in short-term, liquid and low-risk assets. This is a disaster for the dynamism and prosperity of our country. In this article, the author shows that this situation results from poorly designed tax and prudential rules in the insurance sector. Despite its drawbacks, Solvency II should solve part of the problem. Yet there remains the issue of the necessary reform of savings taxation in France.

Suggested Citation

  • Gollier, C., 2015. "Long-term savings: the case of life insurance in France," Financial Stability Review, Banque de France, issue 19, pages 129-136, April.
    • Handle: RePEc:bfr:fisrev:2015:19:13
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    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/financial-stability-review-19_2015-04.pdf
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    References listed on IDEAS

    as
    1. Bec, Frédérique & Gollier, Christian, 2006. "Assets Returns Volatility and Investment Horizon: The French Case," IDEI Working Papers 467, Institut d'Économie Industrielle (IDEI), Toulouse, revised 30 Nov 2008.
    2. Gollier, Christian, 2002. "Time diversification, liquidity constraints, and decreasing aversion to risk on wealth," Journal of Monetary Economics, Elsevier, vol. 49(7), pages 1439-1459, October.
    3. Ravi Bansal & Amir Yaron, 2004. "Risks for the Long Run: A Potential Resolution of Asset Pricing Puzzles," Journal of Finance, American Finance Association, vol. 59(4), pages 1481-1509, August.
    4. Catherine Bobtcheff & Thomas Chaney & Christian Gollier, 2016. "Analysis of Systemic Risk in the Insurance Industry," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 41(1), pages 73-106, March.
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    Cited by:

    1. Pierre-Emmanuel Darpeix, 2015. "Systemic risk and insurance," PSE Working Papers halshs-01227969, HAL.
    2. Pierre-Emmanuel Darpeix, 2015. "Systemic risk and insurance," Working Papers halshs-01227969, HAL.
    3. Michal Dvorak & Marcela Gronychova & Vaclav Hausenblas & Zlatuse Komarkova, 2016. "Could the Czech Insurance Sector Be a Source of Systemic Risk?," Occasional Publications - Chapters in Edited Volumes, in: CNB Financial Stability Report 2015/2016, chapter 0, pages 116-126, Czech National Bank.
    4. Runsheng Gu & Lioudmila Vostrikova & Bruno Séjourné, 2020. "Portfolio optimization of euro-denominated funds in French life insurance," Working Papers hal-03025191, HAL.

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