Main determinants of profit sharing policy in the French life insurance industry

Our analysis confirms practitioners’ insight on the alignment with the 10-year French government bond and we analyze the departure of the participation rates away from this reference. Our data indicate that financial margins are more strictly targeted than participation. We find evidence that surrenders are fairly uncorrelated with participation, suggesting that other levers are used to monitor them. If higher asset returns can imply better yield for policyholders, riskier portfolios do not necessarily translate into better participation.