Market Insights MUTUAL AND COOPERATIVE INSURERS INTERNATIONAL COOPERATIVE AND MUTUAL INSURANCE FEDERATION

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1 Market Insights FRANCE 211 THE FRENCH INSURANCE MARKET SHARE AS HELD BY MUTUAL AND COOPERATIVE INSURERS INTERNATIONAL COOPERATIVE AND MUTUAL INSURANCE FEDERATION N o 6/213

2 French premium growth % Growth French mutual premiums and market share Premiums EUR millions Total Life 1, 37.6% 37.9% 8, 36.9% 6, 4, 2, -.4% Non-life 15.5% -7.4% Total market* 7.6% 6.9% 8.7% Mutual market *Total market as per Swiss Re, sigma No3 /212, Statistical appendix, update January % 39.% 4.% 35.% Market share French market summary Like many European economies, the French insurance market has faced many challenges since the onset of the global financial crisis in 27/8. Deterioration and volatility in investment markets, exposure to Eurozone sovereign debt risks, a low interest rate environment, and added pressures on capital requirements with the impending Solvency II directive have all decreased premium growth potential for French insurers. Insurance premiums in the French market have been extremely volatile since 27, especially in the life sector. Total premium income in 211 was.4% lower than precrisis levels, although annual premium volumes had grown and contracted sharply during this period. The greatest decline was in the French life market (which made up 65% of total industry premiums in 211), which suffered a 7.4% drop in premiums since 27. Conversely, the non-life sector proved resilient to the worsening economic conditions, as premiums increased year-on-year since the crisis, with a total growth of 15.5% between 27 and 211. The French mutual 1 sector consistently outperformed the total market since 27, with a 7.6% growth in premium income in this period. As a result, the market share of the mutual sector increased from 36.9% in 27 to 39.9% in 211, a growth of 8.1% in market share. Mutuals increased premiums in both life and non-life business, although it was a significant 15.5% growth in the mutual life market that drove the increase in the mutuals total market share (up from 31.3% in 27 to 36.2% in 211). Despite an 8.7% growth in the mutuals non-life premiums since 27, the mutual sector experienced a small loss in non-life market share, decreasing from 49.7% in 27 to 46.7% in Includes mutual insurance companies and insurance subsidiaries of cooperative banks and cooperative-controlled groups. Mutuelles 45 insurers are not included in ICMIF figures, as they are excluded from Swiss Re s data on the total size of the French insurance market % The French mutual insurance sector in 211 EUR 78.6 billion in premium income 39.9% share of the total French market EUR billion in investments 75,919 employees EUR billion in assets

3 French mutual market summary Life Gross written premiums (EUR millions) % Growth % Change in market * Life 46,41 51,742 46, % -12.6% Non-life 32,576 31,77 3, % +4.2% Total 78,617 82,819 77, % -7.3% *Change in the market as per Swiss Re Premiums EUR millions 1, 8, 6, 4, 2, 32.3% 31.3% 33.3% 35.5% 36.2% 4% Market share Life insurance % Turbulence in the financial markets following the onset of the financial crisis led to a 1.6% decline in French life premiums in 28, especially in savings products, just as in other European countries with a high proportion of unit-linked life insurance products, such as the UK (-27.1%) and Italy (-12.8%). The following two years saw a recovery in premium volumes, as in other mature European life markets. Attractive interest guarantees on life policies offered during a period of historically low interest rates led to a growth in new business sales. However, as other banking saving products became more attractive in 211, sales slumped in individual endowment premiums, resulting in an overall 12.6% contraction of the market (compared to 18% growth between 28 and 21). Mutual life premiums followed a similar trend to the total market, with a sharp decline in premium volumes in 28 (-7.7%) followed by two years of positive growth, before another contraction in premium income in 211 (-11%). Between 27 and 211, the mutual life market grew by 6.9%, while the total life market declined by 7.4%. This resulted in a year-on-year increase in life mutual market share, up to 36.2% in 211 from 31.3% in 27. Over 8% of life insurance business written by French mutuals in 211 was for savings and retirement ( épargne et retraite ) policies. Premium income from these lines fell by 13.3% from the previous year, as poor economic conditions and competition from other banking and investment products made long-term insurance products less attractive to consumers. Personal protection and health Savings and retirement Creditor 82.2% (-13.3%) French mutual life market % (+8.1%) 1.1% (+5.3%) 15.3% (+1.2%) Other Numbers in brackets show % change in gross written premiums

4 Just over 15% of mutual life premiums were for personal protection and health ( prévoyance et santé ) products, up from 12.5% in 211, as mutuals saw a double-digit increase in premium volumes (+1.2%). The total French life insurance market saw little change in 211, with a small increase in individual (+6%) and group (+2.5%) life insurance premiums, and a negligible change in premium income from sickness and accident policies. The rest of the mutual life market was composed of creditor insurance ( l assurance des emprunteurs ) and other life products, with a growth in premium income in 211 of +8.1% and +5.3% respectively. The growth of French mutuals since the crisis has been driven by the mutual life sector, with a 16% increase in life market share since 27 (up from 31.3% to 36.2% in 211). Largest French mutual life insurers in 211 Mutual rank Company Premium income EUR % Growth Crédit Agricole Assurances 1 18,2, 21,1, 17,798, -13.7% 2 GROUPAMA 1 5,79, 6,35, 6,36, -9.5% 3 Covéa 2 4,59,493 4,475,361 4,69, % 4 AG2R La Mondiale 1 4,361,66 5,255,562 5,734,27-17.% 5 Natixis Assurances 1 3,639,31 3,81,75 3,53,34-4.5% 6 MACIF 1 2,71,18 3,155,586 2,885, % 7 MACSF 1,6,54 1,618,488 1,419,16-1.1% 8 ACMN 1,161,9 1,581, 1,566,1-26.5% 9 PRÉPAR VIE 681, 717, 576, -5.% 1 MAIF 643,92 878, , % 11 Le Conservateur 57,173 75, , % 12 SMABTP 49, 474,97 51, % 13 AGPM 331, , , % 14 MUTEX 315, , ,23-9.1% 15 Caisse Mutuelle D'Assurances Sur La Vie 197,968 94,59 14, % ICMIF members highlighted 1 French business only 2 Includes international business

5 Non-life insurance The French non-life sector has shown robust growth since 27, in contrast to the contraction of the life market. Premium income increased year-on-year between 27 and 211, as improved economic conditions and rate increases led to accelerated growth in 211 (+4.2%). A focus by insurers to improve technical profitability led to premium rate increases in the two largest lines of non-life business in France, motor and property, which increased by 3.8% and 6.3% respectively, a trend that was seen across Western Europe, notably in Germany and the UK. Mutual non-life business grew consistently since 27, with an overall increase in premium income of 8.7%. Growth of the mutual non-life sector between 27 and 211 was almost 7 percentage points lower than the total French market (+15.5%), and led to a loss in the market share of mutuals, slightly down from almost half of the non-life market (49.7%) before the crisis, to 46.7% in 211. However, non-life mutuals reversed the decline in market share seen in 21, with a small increase of.6% in 211 (up from 46.5% in 21). Premiums EUR millions 35, 3, 25, 2, 15, 1, 5, 49.7% 47.8% 48.% 46.5% Non-life 5% 46.7% 4% 3% Market share French mutual non-life market % (-1.3%) 37.2% (+3.%) French mutual non-life insurers saw a growth in premiums in most product lines in 211, as the whole of the French non-life market sought to improve technical profitability to compensate for recent years of poor underwriting results, through the hardening of premium rates. In motor business, the largest class of mutual business with 37% of 211 premiums, growth was 3%, slightly less than the total motor market which grew by 3.8%. In personal and commercial property lines, mutuals followed the trend seen across the total non-life market, with a growth in 211 of 3.9% and 3.2% respectively. Just under 14% of mutual non-life premium income in 211 was written for property business. Risk and liability premiums, both professional and private risk, made up 28% of mutual non-life premiums in 211. Professional risk premiums saw little change in 211, however private risk business (including general civil liability policies) grew by 9% from the previous year. Smaller business lines saw the largest growth in premium income in 211, with an 8% growth in agricultural premiums and 41% growth in reinsurance written by the mutual non-life sector. Other business lines, including transport, construction and natural disasters, made up 17% of the mutuals non-life portfolio in 211, although premium income for these product lines dropped by 1.3% from the previous year 1.7% (+41.%) 5.7% (+3.2%) Motor Professional and enterprise risk Private risk and other liability Personal property Commercial property Agriculture 2.2% (+8.1%) 7.9% (+3.9%) 16.6% (+9.%) 11.3% (-.3%) Reinsurance Other Numbers in brackets show % change in gross written premiums

6 Largest French mutual non-life insurers in 211 Rank Non-Life ICMIF members highlighted Company Premium income EUR % Growth Covéa 1 9,843,554 9,189,471 8,917, % 2 GROUPAMA 2 4,15, 3,827, 3,71, +4.9% 3 MACIF 2 2,929,989 2,89,43 2,791, % 4 MAIF 2,458,1 2,364,71 2,39, % 5 Crédit Agricole Assurances 2 2,3, 2,1, 2,855, +9.5% 6 AG2R La Mondiale 2 1,887,127 1,959,815 1,8, % 7 SMABTP 1,641, 1,41,892 1,51, +17.1% 8 MATMUT 1,629,788 1,526,669 1,441, % 9 MUTEX 59,77 68, , % 1 AREAS 481, , ,36 -.8% 11 MACSF 48,323 46,69 43, % 12 SMACL 311, ,83 285, % 13 SHAM 296,722 29,49 275,2 +2.2% 14 Mutuelle de Poitiers Assurances 294, ,61 269, % 15 MAF 269, , , % 1 Includes international business 2 French business only Assets of the mutual sector The asset value of the French mutual sector in 211 was EUR billion, a growth of 4.5% from the previous year (21: EUR 588. billion). Mutuals assets increased by 16% since 27 (EUR 531. billion), although there was little change in asset values in 28 and 21 as the high proportion of French insurers assets placed in investments were hit by weakness in the European equity markets. Mutuals investment assets were valued at EUR billion in 211, and made up nearly 9% of total assets. Investment assets in 211 grew by 3.9% from the previous year (21: EUR billion), following a 3.8% drop in 29/ of the largest 15 mutual non-life insurers posted positive premium growth in 211

7 Asset values EUR millions 8, 7, 6, 588,7 587, , ,48 531,36 5, 4, 3, 2, 1, Mutual insurers assets grew by 16% between 27 and 211 Employees in the mutual sector Reported figures show that mutual insurers in France employed just under 76, people in 211, a 1% growth from 21 (74,933) and an 18% growth from pre-crisis levels (27: 64,127). Employment data is not available for every mutual insurer within the French market however, leading to an estimation of the number of people employed by the sector at over 1, , 2, 3, 4, 5, 6, 75,919 74,933 69,16 71,259 64,127 7, 8, Number of employees

8 To view other ICMIF reports in the Market InSights series, please visit Market InSights: France 211 The research team at ICMIF: Project Manager: Ben Telfer Editing: Faye Lageu and Shaun Tarbuck Report design: Iain Worgan Published July 213 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright International Cooperative and Mutual Insurance Federation (ICMIF) 213 ICMIF Denzell House Dunham Road Bowdon Cheshire WA14 4QE United Kingdom Telephone: Fax: Shaun Tarbuck, Chief Executive The International Cooperative and Mutual Insurance Federation (ICMIF) is a best practice organisation committed to giving its members from around the world a competitive advantage. ICMIF helps to grow its mutual and cooperative insurance member organisations by sharing strategies and the latest market intelligence. ICMIF Market InSights reports are a series of market-specific reports compiled using the latest data from ICMIF s Global Mutual Market Share research, a market intelligence report on the size of the global mutual and cooperative insurance sector. Published annually alongside the ICMIF Global 5, a definitive list of the 5 largest mutual and cooperative insurers in terms of premium income, the report highlights how since 27 the mutual and cooperative model has been the fastest growing part of the global insurance market; maturing from a global share of 23.6% to 26.7% in 211. For more information please visit: