The modern French insurance market

New concentration of the French insurance market

In 1968, the main nationalized companies were pooled up into three large entities.

By ministerial decree of 17 January 1968, Michel Debré, Minister of the Economy and Finance, decided to "concentrate" the French insurance sector in order to address the challenges encountered by some companies and "better face international competition". The 34 companies nationalized in 1946 were grouped into three large public insurance groups: UAP, AGF and GAN.

This measure was taken after these companies’ general performance had deteriorated and their market share had fallen from 66% in 1946 to only 38% in 1968.

Development of mutual companies in France

Based on the principle of shared responsibility and solidarity between members, disregarding financial gains, mutual companies had made significant progress in the 1960s, with their portfolios growing considerably thanks to alliances with various socio-professional or specific interest groups.

These mutual companies have their own professional structure: the Groupement des Entreprises Mutuelles d'Assurance (GEMA), created in 1964.

The development of motor insurance in France

In 1958, compulsory motor insurance was introduced, creating a real boom in this business which became the driving force of the market.

During the 1960s, car sales exploded, especially with the launch of small models (Volkswagen Beetle, Renault 4L, Citroën 2CV, Fiat 500, ...).

In 1951, public authorities created the Fonds de Garantie Automobile (Automobile Guarantee Fund).

Establishment of large French international insurance groups

Several market players are developing their activities abroad. The creation of a common European market promoted cross-border operations.

In 1969, the foreign activities of French insurers accounted for 11% of the total market revenues.

On the local market, major merger operations began at the end of the 1970s with Claude Bébéar on the move. The latter, at the head of the Ancienne Mutuelle de Rouen, took over the Compagnie Parisienne de Garantie in 1978.

The Drouot group was taken over in 1982, followed by Secours and The Providence in 1986 and Compagnie du Midi in 1988. The AXA brand was launched in 1985.

The privatized UAP group joined AXA in 1996. This last joint venture gave birth to the leading insurance company in the French market and to one of the world leaders in the business.

Reforms and return to the private insurance sector in France

As early as 1980, new reforms were undertaken to encourage market privatization, with law of 2 July 1986 promulgated to privatize nationalized companies.

Despite a difficult start due to structural problems, the privatization of the market leaders of the time was eventually achieved. MGF was privatized in 1987, UAP in 1994, AGF in 1996 and GAN in 1998.

The French reinsurance market

Two French reinsurers dominate the market.

CCR: Set up under the framework of the law of 25 April 1946, the Caisse Centrale de la réassurance (CCR) benefits from:

• a compulsory legal cession of 4% of the entire French reinsurance market,
• the status of a public reinsurer with commercial attributions, which allows it to develop products and to manage several State guarantees,
• the possibility of conducting reinsurance activities with French and foreign companies.

In 2017, CCR gave birth to CCR Re, a subsidiary specialized in commercial reinsurance.

SCOR: In 1970, the Société Commerciale de Réassurance (SCOR) was established by public authorities. It then took over the entire commercial reinsurance portfolio of the CCR and that of Nationale Réassurance, a subsidiary of The Nationale.

In the 1980s, SCOR [5] embarked on a process of consolidation with the purchase of La Vittoria Riassicurazioni (Italy) in 1988, UAP Re (France) in 1989, Deutsche Kontinentale Rück (Germany) in 1989 and the purchase of the reinsurance portfolio of the American insurer Allstate in 1996.

Finally, SCOR bought the Swiss reinsurer Converium in 2007.

• 1960
  Establishment of the Mutuelle Assurance des Commerçants et Industriels de France (MACIF)
• 1963
  Creation of the first assistance company in France, Europ Assistance
• 1964
  Establishment of the Groupement des Entreprises Mutuelles d’Assurance (GEMA)
• 1967
  Decree reducing CCR’s legal cessions from 4% to 2%
• 1968
  Decree of 17 January pooling up national companies into three entities, UAP, AGF, GAN
• 1970
  Establishment of the Société Commerciale de Réassurance (SCOR)
• 1972
  Establishment of the Groupement des Assurés du Commerce et de l’Industrie (GACI)
• 1973
  - Establishment of the headquarters of the Comité Européen des Assurances (CEA) in Paris
  - Creation of the Paris Insurance Institute
• 1976
  Establishment of the Insurance Code
• 1978
  Spinetta Law of 4 January making construction insurance mandatory
• 1982
  Law of 13 July on compensation for victims of natural disasters
• 1985
  Groupe Mutuelles Unies-Drouot is renamed AXA
• 1987
  Privatization of MGF
• 1989
  Law of 31 December transforming all civil insurance companies into mutual firms
• 1990
  Abolition of the Insurance Department and distribution of control and regulatory tasks between the Treasury Department (Ministry of Finance) and the Insurance Control Commission (CCA)
• 1993
  - Creation of the European Union
  - Modification of the status of the Caisse Centrale de Réassurance into a limited company whose major shareholder is the State
• 1994
  - Major privatization wave in the insurance sector
  - Privatization of UAP
• 1996
  - Privatization of AGF
  - AXA-UAP merger
• 1998
  Privatization of GAN
• 2001
  Reform of the Mutuality Code
• 2002
  Adoption of the European regulatory directive “Solvency I”
• 2003
  Adoption of the law governing financial security
• 2004
  Enforcement of the "Solvency I" directive
• 2005
  - Integration of the intermediation directive into the Insurance Code
  - Chatel Act of 28 January amending the provisions concerning tacitly renewable insurance contracts
• 2009
  Adoption of the European regulatory directive "Solvency II"
• 2010
  Creation of the Supervisory Authority (ACP)
• 2017
  Creation of CCR Re, a subsidiary specialized in commercial reinsurance
• 2018
  Publication of the Insurance Distribution Directive (IDD)