We study intergenerational risk sharing in Euro-denominated life insurance contracts. These savings
products represent 80% of the life insurance market in Europe. Using regulatory and survey data for the
French market, which is €1.3 trillion large, we analyze the patterns of intergenerational redistribution
implemented by these products. We show that contract returns are an order of magnitude less volatile than
the return of assets underlying these contracts. Contract return smoothing is achieved using reserves that
absorb fluctuations in asset returns and that generate intertemporal transfers across generations of investors.
We estimate the average annual amount of intergenerational transfer at 1.4% of contract value, i.e., €17
billion or 0.8% of GDP. Finally, we provide evidence that smoothing makes contract returns predictable, but
inflows react only weakly to these predictable returns.