Long-term savings: the case of life insurance in France

Christian Gollier ()

Financial Stability Review, 2015, issue 19, 129-136

Abstract: The life insurance market in France, which has captured EUR 1.5 trillion in savings, is now facing major challenges. While households that invest in this savings product mostly have very long-term investment horizons, insurance companies mainly invest in short-term, liquid and low-risk assets. This is a disaster for the dynamism and prosperity of our country. In this article, the author shows that this situation results from poorly designed tax and prudential rules in the insurance sector. Despite its drawbacks, Solvency II should solve part of the problem. Yet there remains the issue of the necessary reform of savings taxation in France.

Date: 2015
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