...Sector Outlook Remains Negative: The sector outlook for the French life insurance market is negative because of the difficult operating conditions, with low interest rates continuing to exert pressure on margins. Nevertheless, the rating outlook for the French life sector is stable reflecting a combination of the strong capital, diversified business mix, large scale and important market positions of the French life insurers rated by Fitch Ratings. Profitability Under Pressure: Fitch believes that the French life insurance market faces a difficult operating environment as persistent low interest rates constrain profitability. Steps to reduce returns credited to policyholders have so far been insufficient to counteract the drag on earnings from persistently low interest rates. This trend is negative for margins on "euro- denominated" (ie with-profits) products. Improving Business Mix: The sector has shown adaptability in developing unit-linked (UL) and protection businesses, but the mix remains...
