Celent Says

Prediction Meets Reality

Nicolas Michellod
Insurance Experts' Forum, March 10, 2011

In the frame of our first report about the French insurance market, published in the beginning of 2008, we warned that the French government deficit and debt levels could represent a threat for the country’s economy. This was well before the financial crisis hit the European continent and its impacts on public spending.

Now the problem has worsened, and even though France is still not directly fingered—as is the case for Portugal, Spain, and Italy following the Greek and Irish governments’ debt crises—the situation remains alarming.

We recently asked French insurance CIOs to tell us their feeling about their industry’s near future and, more importantly, whether they felt some macroeconomic factors were impacting their business and growth prospect in the mid to long-term. Some of them mentioned that the French government was in serious need for more financial resources, and would try sooner or later to tap savings accumulated by the French population.

It is well known in France that the government is currently analyzing different alternatives to change the current tax system. It was publicly announced last week that the tax shield (law stipulating that no taxpayer pays more than half their income in taxes) implemented by Nicolas Sarkozy after his election as president will be abolished.

Taking into consideration the current public debt of the country, a reform of the tax system is a priority that everybody should understand. Among the different alternatives currently evaluated by the government, there is the willingness to increase taxes wealth accumulated through life insurance products and retirement savings.

Our CIOs were right, and the decision to tap savings accumulated by French citizens is going to impact the French life insurance industry in the coming years…

This blog has been reprinted with permission from Celent.

Nicolas Michellod is a senior analyst in Celent's insurance practice, and can be reached at nmichellod@celent.com.

Readers are encouraged to respond to Nicolas using the “Add Your Comments” box below.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Why Insurers Need More Than a Policy Admin System

For some insurers, not being able to handle the volume of quotes that are being submitted to them means leaving significant money on the table.

The Pitfalls of Using Assembly Line Methods to Create Software

Most of the time, when the business needs IT, it is for custom software development, just like creating a concept car.

Next Step in the Internet of Things for Life Insurance

As the use of wearables increases, particularly for use beyond an individualís fitness, it will be critical for standards and services to emerge to bring this data to multiple users.

Wearables and Gamification in Life Insurance Goes Mainstream?

With so many U.S. households still uninsured, insurers are going have to try new things to re-position their product, focusing on consumer needs.

Will John Hancock Vitality Transform Insurance?

The Vitality program integrates this information directly into the rewards, giving you credit for the exercise, just by virtue of reporting it.

Why Customers Should Want Innovative Insurers

At a time when confidence in the insurance industry has been compromised, innovative companies can break the mold.