...Low Interest Rates Drag Down Profitability Fitch Ratings views the sector outlook for the French life insurance market as negative because of the difficult operating environment, where low interest rates constrain profitability and future tax laws are uncertain. Steps to reduce returns credited to policyholders have so far been insufficient to counteract the low interest rates, resulting in margin pressure on euro-denominated products. The sector has attempted to develop protection businesses but has so far struggled to diversify away significantly from traditional savings-type business, which is less profitable and more capital intensive. There has been some success in the more profitable unit-linked type business, along with equity market performance. The maturity of the French life market is resulting in only moderate net collections (premium income less benefits paid), owing to higher lapses than historically, which offset stronger inflows from the current attractiveness of products...
