Indeed, an exponential growth in unit-linked investments (UCI) and a rapid development of pension savings plans (PSP) during the first quarter of this year has been observed. This is partly due to the growing share of contributions collected in unit-linked products.
Contributions amounted to EUR 77 billion in the first half of the year, of which more than EUR 19.3 billion came from net unit-linked inflows.
In June, of the EUR 13.7 billion in contributions, EUR 3.4 billion came from unit-linked inflows.
This trend in unit-linked inflows is gradually narrowing the gap between unit-linked and euro fund inflows.
Higher net unit-linked inflows allow insurers to invest more in assets that favour the productive economy, due to the long-term nature of these savings, which means that there will be more investors in the market, or larger investments by insurers.
Life insurance is therefore an increasingly profitable sector given the increase in its benefits: total benefits paid to savers in June 2021 amounted to €12.3 billion, more than €2 billion more than in the previous two years (€10.3 billion in 2020 and €10.1 billion in 2019).
All these factors, together with a growing desire on the part of savers to diversify their life insurance, in order to improve the expected return, require increasingly important risk management.
Euro funds, which are mainly invested in government debt, have gradually lost profitability. Interest in unit-linked funds has therefore increased along with their share in the collection of contributions, which confronts fund managers with a new problem: explaining the risks of unit-linked funds clearly to savers. This is why new digital tools are being developed to help asset managers better understand the situation of the funds in which their clients are interested.
EnvestBoard is a platform dedicated to investment funds. Through a unique technology, asset managers can strengthen their fund selection and portfolio construction, ensure compliance with regulatory obligations, while facilitating advice to their clients with comprehensive arguments and a unique digital experience.
EnvestBoard helps banks, life insurers and asset managers to bring understanding to end clients in fund investment.