The credit insurance market - France

borrower's insurance is a crucial financial instrument, guaranteeing protection for borrowers by covering all or part of their monthly payments or outstanding capital in the event of certain unforeseen events. Events generally covered include death, total and irreversible loss of autonomy, permanent disability, temporary work incapacity (ITT) and loss of employment. Between 2018 and 2022, the loan insurance market in France grew significantly, with an average annual growth rate of 5.19%. In 2022, this growth continued, but major challenges loomed on the horizon. The loan insurance sector remains highly concentrated, largely dominated by banking institutions, notably the three main players CNP Assurance, Crédit Agricole Assurances and Crédit Mutuel, which hold 61% of the sector's market share. However, despite the positive performance of recent years, the sector faces a number of major challenges. Rising interest rates, which triggered an international property crisis in 2023, have led to a decline in the number of loans granted. What's more, the introduction of the new Lemoine Law in February 2022 has altered the regulatory landscape, conferring more power and freedom on policyholders. Loan insurance players must therefore adapt to these major changes. Loan insurance premiums are closely linked to demand for home loans, as well as to the duration of these loans, which continues to rise, reaching an average of 20.8 years in July 2023. In addition, they depend on the timing of these loans, which is closely linked to fluctuations in property prices and banks' policies on lending rates . Ultimately, the sector is highly dependent on demand, while benefiting from the banks' obligation to take out this type of insurance for their borrower customers. In this ever-changing environment, loan insurance players will need to demonstrate their agility to cope with the worsening economic context and ever-changing regulatory requirements, while continuing to support the financial security of French borrowers.