French insurers have quietly built up a war chest of €152 billion in reserves from loyal policyholders. Now, they’re using that same pool of money to offer flashy “boosted” interest rates to attract new customers, while long-time savers watch their returns stagnate. This isn’t a theoretical risk, it’s happening right now across the assurance-vie (life insurance) market.
The mechanism behind this wealth transfer sits in a provision called the PPB (provision pour participation aux bénéfices), the profit-sharing reserve. Legally, insurers must return at least 85% of financial gains to policyholders. But they can park up to 15% in this reserve, smoothing returns over time. The catch? They decide when and how to distribute it.
The €152 Billion Question: Whose Money Is It?
Data from France Assureurs shows the PPB across all euro funds reached €152 billion in 2024, roughly 11% of total assets under management. This reserve belongs collectively to policyholders, not the insurance companies. Yet insurers have wide discretion over its use.
The PPB must theoretically be paid out within eight years. In practice, insurers continuously add new provisions while old ones mature, creating a rolling buffer. Since 2014, this has led to an almost uninterrupted accumulation, with the reserve growing from €62-106 million annually at Afer alone to €260 million provisioned in 2025, a record high.
Cyrille Chartier-Kastler, founder of Good Value for Money, calculates that the current 10.61% reserve level could support payouts of 1.50% annually for seven consecutive years, even if markets tanked. That’s a massive safety net. But instead of returning this surplus to the loyal customers who built it, insurers are deploying it as a marketing weapon.
How Boosted Rates Actually Work
When you see advertisements promising “up to 6%” on assurance-vie contracts, the fine print reveals the trick. These rates rarely apply to your entire balance:
- New money only: The bonus typically covers only fresh deposits made during a promotional window
- Limited duration: The boost lasts 6-24 months before reverting to standard rates
- Unit-linked conditions: Most require investing 30-70% in unités de compte (non-guaranteed equity funds)
- Complex tiers: BNP Paribas Cardif offers 4.25% only if you hold 45%+ in unit-linked funds
For example, Fortuneo Vie promotes up to 6.5% net, but that requires maintaining over 70% of your portfolio in risky unit-linked assets. The base euro fund rate? Just 3%.
The Société Générale group (Sogécap) provides another clear case. Their Séquoia and Erable contracts advertise boosted rates up to 4.65%, but only for customers willing to allocate 50%+ to unit-linked investments. Customers sticking with the secure euro fund get a modest 2.65%.
The Math Behind the Transfer
Here’s where it gets uncomfortable for long-term savers. When an insurer like Afer provisions €260 million into its PPB in 2025, it’s setting aside money that could have been paid out immediately to existing policyholders. Without this provision, Afer’s 2025 rate would have been 3.33% net instead of the 2.65% actually paid.
That 0.68 percentage point difference represents €270 million that stayed in the company’s control. Meanwhile, Afer simultaneously runs campaigns offering new customers on its Afer Génération contract a 4.05% rate, conditional on an eight-year lock-in period.
The mechanism is clear: money earned collectively gets redirected to attract individual new business.
Market-Wide Evidence
A comprehensive review of 2025 rates confirms the pattern:
- Corum Life leads with 4.10% on its euro fund, but caps investment at 25% of any deposit
- AMPLI Mutuelle offers 3.75% consistently, but it’s a monosupport contract with no bonus flexibility
- Carac pays 3.55% base but adds a 1% bonus for new 2025 deposits, reaching 4.55% for newcomers
- La France Mutualiste delivers 3.50% across its range, refusing to play the bonus game
The contrast is stark. Insurers who resist temporary bonuses, like AMPLI and La France Mutualiste, serve their entire client base equally. Those chasing growth use legacy reserves to subsidize selective offers.
The Regulatory Blind Spot
The ACPR (Autorité de contrôle prudentiel et de résolution) has expressed concern about PPB management. In January 2024, they signaled increased scrutiny over how insurers distribute these reserves. Yet the rules remain: insurers can allocate PPB to support rates for any customer segment, including new acquisitions.
This creates a perverse incentive. Why pay loyal customers their fair share when you can use that same money to lure new ones? The eight-year distribution rule sounds protective, but insurers easily circumvent it by making fresh provisions that push redemption dates further into the future.
What This Means for Your Assurance-vie
If you hold an older assurance-vie contract, you’re likely funding your own inferior returns. Your insurer may be:
- Underpaying on your existing balance to build reserves
- Offering higher rates to new customers from those same reserves
- Requiring you to take more risk (unit-linked allocation) to access decent rates
The Afer example proves this: €260 million provisioned in 2025 reduced payouts for all 750,000 existing members, while the launch of Afer Génération offered preferential terms to new sign-ups.
Actionable Steps for Policyholders
For existing policyholders:
– Check your insurer’s PPB levels in annual reports
– Compare your rate with the insurer’s advertised “boosted” offers
– If gaps exceed 0.5%, consider switching contracts
– Remember: transfers between assurance-vie contracts reset the eight-year tax clock
For new investors:
– Ignore headline rates, focus on the base euro fund performance
– Calculate the total return impact of required unit-linked allocations
– Prefer insurers with transparent, uniform rates like AMPLI or La France Mutualiste
– Verify the insurer’s historical PPB usage, high provisioning benefits new customers at your expense
The Bottom Line
The €152 billion in PPB reserves represents a silent wealth transfer from patient savers to marketing departments. While insurers claim they need reserves for stability, the simultaneous launch of promotional rates tells a different story.
French law permits this practice, but legality doesn’t equal fairness. Long-term policyholders built these reserves through decades of loyalty. Using them to fund selective bonuses for newcomers breaks the fundamental insurance principle of mutualization.
Before accepting a boosted rate offer, ask yourself: who’s really paying for this? The answer is probably the person sitting next to you, and maybe you, too.
For deeper context on how French insurers generate above-market returns, read how French insurers generate above-market euro fund returns and the hidden costs of this practice. To understand broader shifts in French savings behavior, see French assurance-vie investment trends and shifting saver behavior in 2025. And for evidence of money moving away from traditional products, check shifts in French savings patterns away from traditional low-risk accounts like Livret A.
