France: product governance key to sustainable market

Speakers at the Fireside Chat: Insurance Wrapped 2025 at SRP France last week emphasised the importance of product governance and building lasting partnerships given the increasing importance of insurers in providing access to structured products via the life insurance wrapper in France, according to Pierre Moretti, president, Neolife.

Insurance is one of the key drivers for structured products - 80% of products in France are sold via insurance wrapper - Pierre Moretti, Neolife

“Insurance is one of the key drivers for structured products - 80% of products in France are sold via insurance wrapper,” he said.

Robin Ribatto, head of alternative assets, Groupama Gan Vie, kicked off the conversation highlighting Groupama’s recent move to open external distribution, which has helped to further segment its client base and enabled the introduction of new thematic products.

“Our recent expansion into external distribution has led to a more refined customer segmentation,” said Ribatto pointing at the importance of meeting customer expectations with dedicated products and major retail campaigns.

“Investors’ appetite is driving structured products towards more modern themes, such as sports and health, and we must provide new products in response to clients' concerns.”

_{Left to right: Robin Ribatto, Groupama Gran Vie; Nicolas Pereda, SwissLife; and Pierre Moretti, Neolife}

Nicolas Pereda (pictured) noted that the structured products business at Swiss Life is divided into two business lines. One focused on developing the offering for the proprietary network and another one specialised in selecting products for distribution partners.

“The quality of the operational listing chain is key for our business as it allows for the rapid listing of numerous products,” said Pereda.

In this context, according to Pereda, transparency and product understanding for both clients and distributors is paramount in delivering the right solutions.

“There are still challenges associated with the complexity of structured products and there is also a need to segment target markets,” he said.

Trends

According to Ribatto, one of the trends observed at Groupama is the acceleration of thematic products in response to economic events.

“We have seen this with the impact of fixed-income products in the market and our own decision not to reopen euro funds, and focusing on capital-guaranteed structured products instead,” he said.

One of the highlights at Groupama in 2024 was “the introduction of structured products based on CDs to secure the return as well as adding a consistent ESG angle to the structured products offered by the group including green, social and sustainable bonds”.

_{Left to right: Robin Ribatto, Groupama Gran Vie; Nicolas Pereda, SwissLife; and Pierre Moretti, Neolife}

Pereda was critical of some of the dynamics seen in the market in recent times which have resulted in a gradual distortion of structured products, particularly with the emergence of underlying assets with decrement overlays.

“These products are increasingly complex, with declining redemption mechanisms and high fixed dividend levels,” he said.

“We think it is difficult for clients to understand these products due to the complexity of the paoffs and marketing.”

Pereda added the product governance framework implemented by Swiss Life to segment target markets and avoid overly complex products prevents the insurer from offering these products.

Ribatto, on his part, pointed the finger at single stock decrement products, adding that Groupama is not participating in this trend either, preferring less complex products that are better suited to its clients.

“We focus on simple payoffs, underlying assets and remuneration structures to guarantee the satisfaction of customers and partners,” he said.

Transparency

A key factor driving the growth of structured products in the French insurance market is the “total transparency regarding the cost sharing included in the products offered,” said Pereda.

“We are very clear in the communication of entry costs between the issuer, the broker and the insurer, as well as distributor compensation,” he said. “This helps avoid conflicts of interest and ensures distributor loyalty.”

Swiss Life also “requires detailed information on costs and compensation fees from each of the issuers the company works with”, added Pereda.

_{Left to right: Robin Ribatto, Groupama Gran Vie; Nicolas Pereda, SwissLife; and Pierre Moretti, Neolife}

Groupama's Ribatto agreed that best transparency practices used in the insurance space, particularly regarding the margins and costs included in structured products, has helped to build trust with investors.

“We have implemented an internal transparency policy, comparable to that of other unit-linked products,” he said.

The panel concluded agreeing on the importance of bringing further transparency to ensure the trust of clients and partners.

“In order to ensure the sustainability of the structured products business we must continue implementing transparency and understanding measures for clients,” said Pereda.

“All industry players must work together to continue growing the structured products business with accountability,” he concluded.

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