In 2005 these same bond rates are around 3

From EUR life insurance contracts, the return of 4 offered by the booklet a is ridiculous. It could prove to be a formidable competitor! Indeed, NET returns of the funds in euros are amputees social security payments (11) and a tax according to their date of opening or closing.

So the performance of a contract of life insurance can beat the actual rate net 4 of the Livret A, must be that same life insurance contract performance exceed 4.5. However, it is hardly the case. Example, in 2007, contracts of life insurance in euros on average showed a net yield of 4.3, 3.8. And this should not be settled in the future. As noted in substance Daniel Collignon, founder of the April Group subsidiary Axéria life two well opposite periods must be distinguished. As much until recent years, the common pot of different periods bond yields was advantageous, even now, this same reality will play against them.

History of a misunderstanding

To understand this reversal, a background is necessary. In 1981, bond rates cavorting at 17, fuelled by chronic inflation due to the two oil shocks and monetary policy and budgetary expansionists. In 2005, these same bond rates are around 3. For a quarter century, yields have therefore ceased of withdrawing. But during this time, attitudes have not evolved! Individuals have continued to accept massive funds in euros. Suddenly, the insurers had to purchase bonds less attractive.

The effect of "subprime".

The misunderstanding continued because the policyholders continued to benefit from satisfactory yields in their eyes. They were unaware that performance came from a stock of securities acquired for a long time.

But now, this fiction has more courses. The truth is emerging. Since 2005, inflation again speak with elle. Present in the facts or over-represented in minds, regardless, it promotes the rebound short rates and bond yields. Result, the newly purchased bonds are better paid than the former. And particular securities borrowing that insurers had to buy to honour successful contracts in euros made by individuals. This cumbersome stock now draws yields down. "In other words, explains Daniel Collignon, the effect of sharing, favourable to the insured, new far plays in reverse." To put it bluntly, new contributors pay now for the alumni.

"And it is not everything", continues the man of art. "Since the beginning of the Decade, the insurers have integrated lines of obligations in their funds in euros, to capture a surplus of performance against the only OAT."

The assumption of losses

But, here again, professionals are now facing a radical inversion of configuration of the market: the onset of the subprime crisis has adjusted the price of risk and dug a difference in yields between private and public obligations.

In addition, to cushion the fall of the performance of the funds in euros, the insurers have invested in equity markets, even in real estate. But, in each of these assets, the situation has also returned. To the point that Daniel Collignon prognostic melting of unrealised gains of the funds in euros, or even a transformation in losses for contracts less well managed.

The trick:

All the funds in euros are not similar. Created funds may very recently to benefit depositors with the current performance of the bond markets.

They therefore offer

more effective coverage against inflation.