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Christian Gibot (Cardif Lux Vie): Low rates, rich assets

For Christian Gibot, CEO of Cardif Lux Vie, life insurance in Luxembourg remains a hugely interesting option in today’s complicated economic environment. It will be particularly appropriate in the years to come given the current environment of persistently low interest rates driving demand for more sophisticated investment options.


How is life insurance changing?

The on-going environment of sustained low interest rates is changing the investment industry completely. Traditionally, life insurance was often based on guaranteed returns and a logic of capital being available at all times. However, the current context requires us to turn to riskier investments as part of a strategy that will achieve good returns. Increasingly sophisticated assets must be embedded in our products. Luxembourg life insurance provides the ideal framework to manage this evolution. Other key trends affecting the industry include digitalization, which is improving customer experience, as well as how sustainability considerations are transforming investment choices. When once these were latent niche concerns, they have now become indispensable to the nature and quality of the service provided.

“The challenge of persistent low rates requires us to be creative and innovative, while offering us the chance to develop valuable products.”

What are the priorities regarding this development?

Above all, our services must be managed to the highest quality standards. Secondly, thanks to our expertise, we are able to develop cutting-edge, innovative products. Customers are looking for new investment options to satisfy their demand for healthy returns, and we must support them by adapting our offering to their investor profile and their needs. Digitalization  is also vital, both at the time clients are on-boarded with us, and during the on-going relationship phases. Service quality depends heavily on this. Finally, long-term investors are looking to give meaning to their actions. Hence our responsible commitment program "My Impact", which has been aligned with recent changes in investors’ outlooks, which supports our strategy and guides our employees’ work. Responsible investment is an important part of this program. We have €28 billion in assets under management, of which we manage approximately €9 billion  in our General Fund. Finally, in these times of social distancing, we are committed to re-thinking the links that connect us. In particular, this involves managing teleworking to ensure a continued collective dynamic. Working from home will therefore certainly become widespread after the health crisis.



What risks and opportunities do you see for the medium and long term?

Margins in our industry remain low while the cost of ever-increasing, wide ranging regulation could harm both our competitiveness and our ability to innovate. It is important to remain attentive to this trend, as it threatens to limit the number of players on the market, while reducing investment capacity. The second major challenge is to preserve the Free Provision of Services (FPS) rules under which we operate. We saw during the first phase of the coronavirus crisis how Schengen Area rules were challenged. We must ensure that the unimpeded circulation of goods, capital and people should not be called into question. Our role as an insurer and as a major financial player gives us major social responsibilities, and this will be central to our strategic planning. Finally, the challenge of persistently low interest rates requires us to be creative and innovative, while at the same time giving us the chance to develop valuable products that meet demand. If we manage to protect ourselves from these risks and include them in our offering, this will open up substantial opportunities.

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