When life insurance becomes solidarity

The world of solidarity finance is in turmoil. From 1is January 2022, all life insurance contracts will be required to offer at least a solidarity fund, i.e. a product devoting 5 to 10% of its assets to the financing of social economy structures and Solidarity (ESS). These funds are nicknamed “90-10”. This should give a boost to these products, which until now have been mainly distributed as part of employee savings: their outstanding amount reached 13.78 billion euros at the end of 2020, 85% of which with the employee savings, according to the FAIR association.

In total, the solidarity funds devote approximately 800 million euros to financing the SSE. “The impact of these products is tangible: the structures supported by our solidarity funds have made it possible to provide 6,400 housing units and support 25,000 people towards employment in 2020”, says Béatrice Verger, head of socially responsible investment (SRI) development at BNP Paribas Asset Management.

Read also Does the retirement savings plan overshadow life insurance?

Concretely, how are these actors selected by the managers of solidarity funds? Each management company develops a specific approach, even if certain heavyweights in the sector, such as the property company Habitat et Humanisme, France Active Investissement or ADIE, are present in most funds.

“Mutualize investments”

For about ten years, the trend has been to create a specific product that serves as a “solidarity pocket” for all the “90-10” funds of the same house and can even be distributed to other management companies that do not have this expertise. “Bringing together our solidarity investments in a single fund allows us to pool our investments, therefore to be able to finance up to several million euros for the same SSE structure in certain cases”, explains Laurence Laplane-Rigal, director of social impact investment at Amundi, whose “pure solidarity” fund, Amundi Finance and Solidarity, alone weighs around 410 millions of euros.

“We support these companies, cooperatives or associations, in their change of size, when they move from the local to the regional scale, or from the region to the national territory”, said Mr.me Laplane-Rigal, citing Vivre en béguinage (supported housing for seniors), Homnia (housing for people with disabilities), La Varappe (integration through employment) and My Retail Box (bulk distribution). Amundi finances a total of 43 SSE structures, for tickets between 800,000 euros and 5 million euros, or even more, in the form of debt or equity contribution.

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