Results of life insurers
In 2008 the life insurance sector posted negative technical results owing to losses in the financial markets. Following a strong recovery in 2009, results have been slightly negative since 2010, this time for structural reasons. Since that year, the benefits paid out by the sector have been higher than the premiums, mainly because of a decline in the sale of new individual life insurance policies. Annual new production has fallen back from around EUR 8 billion in 2006 to approximately EUR 4 billion in 2011, largely reflecting the introduction of tax-efficient bank saving products in 2008 (note 1).
Life insurers also have to contend with a fall in confidence owing to the controversy surrounding unit-linked insurance policies. A positive development is that turnover in the collective sector (contracts with pension funds or employers) is increasing.
The negative cash flow has made it all the more important to realise sound investment returns and curtail fixed operating expenses. Statistics show that life insurers succeeded in keeping operating costs more or less stable at around 13% to 14% per euro of premium received. This is good news. The low-interest rate environment and longer life expectancy had a negative impact on the results.