French insurance market structure

The French insurance market stakeholders

The Prudential supervisory and resolution authority - Autorité de Contrôle Prudentiel et de Résolution (ACPR)-, the entity in charge of supervising the banking and insurance sectors in France, enumerates 695 licensed insurance organizations as of 31 December 2019.

The companies authorized to operate in France are the following :

• 277 companies governed by the Insurance Code
• 33 social welfare institutions, governed by the Social Security Code
• 385 mutual insurance companies, governed by the Mutuality Code

* Supplementary occupational pension fund (FRPS)
⁽¹⁾ Total of insurance companies governed by the Insurance Code
⁽²⁾ Pension institutions governed by the Social Security Code
⁽³⁾ Mutuals governed by the Mutuality Code
Sources : ACPR and FFA

Beginning in the mid-1990s, the concentration trend in the French insurance market [4] has continued over the past decade.

Between 2010 and 2019, the number of approved organizations has fallen sharply, being divided by almost two, from 1129 entities to 695. Mutual companies have declined by 46%, insurance companies by 22% and reinsurance companies by 45%.

Insurance companies governed by the French Insurance Code

This category comprises licensed entities, governed by the Insurance Code. At the end of 2019, it included 277 entities, nearly 63% of which were non-life insurance companies.

Also included in this group are life insurance companies (30%), reinsurance companies (4%), supplementary occupational pension organizations (FRPS) (1.7%) and third country branches (1.3%).

Breakdown of insurance companies governed by the French Insurance Code (Situation as at 31.12.2019)

Sources : ACPR and FFA

Insurance companies governed by the Insurance Code are authorized to underwrite life and non-life insurance classes of business.

However, they are required to separate life and non-life activities within companies specialized in one or the other activity (life or non-life).

There are two main types of insurance companies:

• Public limited insurance companies,
• Mutual insurance companies (SAM) or insurance mutual companies (SMA) often called mutual companies without intermediaries (SMI).

Public limited insurance companies

These are companies that:

• have a share capital,
• have a profit-making purpose (profit-seeking),
• are authorized to underwrite in all classes of business listed by the Insurance Code (life and non-life),
• market their products through all types of networks,
• have salaried managers appointed by the shareholders.

Insurance Mutual Companies (SAM)

These companies:

• have no share capital, but an establishment fund,
• have a minimum of 500 members,
• do not have shareholders. The members are the owners of the company,
• can market their products through paid intermediaries,
• non-life contributions can be fixed or variable but must be fixed for life insurance,
• have a non-profit purpose,
• are managed by voluntary directors, generally elected by the members.

Mutual insurance companies (SIM)

These companies are subject to the same rules as the SAMs, sharing the same philosophy and operating methods. However, in order to function, these companies are required to:

• have a minimum of 300 members,
• have an exclusively professional or regional object,
• have variable membership fees. They can therefore proceed, if need be, to membership fee recalls,
• not to use intermediaries to market their products.