What are the characteristics of life insurance contracts in Luxembourg?
Mathieu Duballet: In response to an increasingly complex and uncertain environment, wealthy families are looking for flexibility, stability and performance. They are aware that there is risk, that there is uncertainty, but all of this is managed and planned. Life insurance in Luxembourg is more relevant than ever in a context of rising interest rates and falling yields.
Internationally recognized as the most advanced wealth and estate planning tool today, it benefits from the stability and security offered by the Luxembourg regulatory framework (security triangle and AAA country).
In addition to the possibility of structuring your estate and succession to measure, the regulatory framework for life insurance in Luxembourg offers the widest investment universe in Europe. It is a true investment platform that offers unprecedented flexibility, allowing investors to achieve their return-seeking goals. In this way, it is possible to diversify investment portfolios by integrating non-traditional assets such as private equity, real estate, private debt, etc. These asset classes now represent 14% of Lombard International Assurance’s assets under management in Europe.
Within LIA Patrimoine, we market the offer of Lombard International Assurance, whose contracts in Luxembourg are 100% unit-linked and fully open architecture, with alliances with nearly 1,000 asset managers and more than 200 custodian banks.
Lombard International Assurance contracts allow combining, within the same contract, discretionary management, advised management, free management, through a combination of Internal Collective Funds (ICF), Internal Dedicated Funds (IDF) or Specialized Insurance Companies ( FAS).
How does it benefit French tax residents to take out life insurance in Luxembourg?
Mathieu Duballet: First of all, I would like to clarify that Luxembourg life insurance does not offer any particular tax advantages beyond tax deferral, similar to what is found in France. It is not on this point that Luxembourg’s offer differs.
2021 has been an excellent year, in line with previous years. Overall, premiums collected on the French market for Luxembourg life insurance increased by +54% compared to 2020, of which 80% corresponds to unit-linked products (source ACA). This is not a new trend, the French market has been a strong growth market for 5 years and remains the leading market for Luxembourg life insurance (45% of new premiums in 2021, ACA source).
The first half of 2022 was part of this same trend, with strong demand from our partners, in terms of asset allocation and financial engineering. What French clients are looking for in Luxembourg life insurance is an answer to more sophisticated financial needs, for which they cannot find solutions in French life insurance.
We can clearly see that our partners are looking for different approaches to structure their clients’ assets. Especially for asset allocation questions. Luxembourg life insurance is also renowned for its international portability, making it a perfect tool for clients who are highly mobile or whose family is scattered across different countries.
What are your strengths and points of differentiation?
Mathieu Duballet: We work with all players in the wealth sector, from the wealth management advisor to the family office, through the custodian bank, asset managers or even tax lawyers and, of course, our own wealth engineers.
What makes us strong is our ability to bring together an arsenal of leading experts around the client to create a tailor-made unit-linked life insurance solution. This allows us to support our partners in structuring from the simplest to the most complex cases, in the selection of players (management companies, custodian banks, etc.) and in complex tenders, in particular with international issues (we are present in more than 25 markets). It is therefore a true interprofessional collaboration.
But this success is also due to strong local location choice. Lombard International Group was one of the first players to create a local distribution entity in France, based in Paris. A team that has also grown last year and will have doubled in a year with new additions this year.
We have a team of experts dedicated to the French market with perfect knowledge of the market and local regulations. We also have unique experience in Europe in managing non-traditional assets such as private equity.
Finally, since 2017 we have had a digital platform acclaimed by our partners: Connect. It is a true service platform that allows you to make 100% dematerialized subscriptions with an electronic signature, but also manage the insurance policy, carry out redemptions and operations during its validity. It is a tool that makes life easier for our partners and frees them to focus on the development of their business and the problems of their clients. Today, more than 80% of subscriptions are fully dematerialized with an electronic signature.
Source: BFM TV
