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Dependency: a “grey gold” rush?

By 2050, there will be nearly 5 million people over 85 years old in France, against 1.5 million today. Dependency – and the loss of autonomy, in particular – is one of the main family-related concerns of the French. Nevertheless, 65% of French people never or rarely discuss it within their family circle, according to a TNS Sofres report in 2016. Fewer than one in four have prepared financially for their loss of autonomy. However, anticipating and financing loss of autonomy, health care, housing, etc. are key issues facing our society. Is this market as promising as it seems?

A market that is slow to take off

According to estimates by the Xerfi research firm, the loss of autonomy insurance market generated €995 million in subscriptions in 2017, corresponding to a 2.6% increase that is relatively small given the growing potential of this market. According to Xerfi, this is explained “by people struggling to imagine themselves coming to the end of their lives (on average, the first policies are taken out at 58 years old), and by people’s reluctance to invest in ‘sunk cost’ insurance, which explains why the market is struggling to take off”.

In 2017, the number of people covered by a long-term care insurance policy reached 6.9 million, encompassing both “primary coverage” policies and “supplementary loss of autonomy coverage” policies (life insurance, death cover and top-up health care coverage). New policy subscriptions were down by 8% for primary coverage and 38% for “GAD” (Garantie Assurance Dépendance)-labelled long-term care cover policies covering serious dependency.

CAA, a key player in dependency risk

Bank insurers have become leaders on the long-term care insurance market in France. Their highly developed local distribution networks and the complementarity of their banking and insurance strategies enable them to propose a comprehensive range of solutions.

Among them, Crédit Agricole Assurances, with Predica – our personal insurance company – ranks as one of the market leaders. We market two different solutions which are adapted to suit our networks:

  • Crédit Agricole: Vers l’autonomie (Towards Autonomy) was launched in 2012. This was one of the first solutions to obtain the GAD Assurance Dépendance® long-term care insurance quality label awarded by the French Insurance Federation. This policy includes the provision of an income and a variety of support services: home audits, assessments to evaluate the need for personal services, assistance with finding places in retirement homes for the elderly, etc.
  • LCL: Garantie Dépendance (Long-Term Care Cover) consists of two formulas: Cosy Prévoyance, open to subscribers between 50 and 75 years old, and Cosy Assistance, open to anyone over 18 years old.

The Group is also a shareholder in Korian, a leading operator of nursing homes, follow-up care and rehabilitation clinics, and rehabilitation and assisted-living homes. CAA has also acquired a 35% stake in the capital of Cogedim Résidence Services, which operates Cogedim Club® residential homes for elderly people. Investments that provide another useful response to aging concerns.

Towards a reform of long-term care in 2019

First announced under the presidency of Nicolas Sarkozy in 2007 but repeatedly postponed ever since, the major reform of long-term care finally appears to be taking shape. In any case, this is a priority for Emmanuel Macron who announced on Wednesday 13 June 2018 that a law on the funding of long-term care would be adopted before the end of 2019 to “tackle the new form of social vulnerability” in old age.

Agnès Buzyn, Minister of Solidarity and Health, launched on October 1 national consultation on the loss of autonomy related to age. The platform is online until December 1 to answer the question "how to take better care of our elders? ". The government's goal is to pass a law in 2019.

To conclude, although the French market for the management of long-term care benefits from a favourable environment, it is also governed by the social protection system in force in France, which is slow to change. Over the coming years, the long-term care market could become one of the growth drivers for bank insurers.

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