Loan insurance: banks retain monopoly
In most cases, mortgages remain attached to group insurance of the lending institution. The insurance delegation represents only 15% of the contracts.
Will the annual cancellation change the game?
Borrower insurance evolved last March with the adoption by parliamentarians of the annual cancellation of loan insurance. This advance allows borrowers to find a better loan insurance contract. For the moment, only the new credits signed since March 2017 are concerned. Previous insurance contracts at that date may, themselves, be terminated as from 1 January 2018. Thus on each anniversary date of their mortgage insurance contract, borrowers households will have the opportunity to renegotiate their contract.
However, like the insurance delegation introduced by the law and its extension to 12 months by the Hamon law, the annual termination of a contract may be made if the coverage conditions of the new insurance are at least equivalent to the old ones.
The insurance delegation never exceeds 15% of the credit files
The change of insurance can be interesting for borrowers at a time when banks have a near-monopoly on loan insurance. Indeed, according to the figures of the French Insurance Federation, the insurance delegation weighed only in 15% of mortgages in 2016. Either 85% of contracts signed with group insurance that is ie those proposed by the banks. For the borrower, group insurance is not always to his advantage from a budgetary point of view. They are on average higher than the offers issued by the new players in the borrower insurance.
With 85% in 2016 and 2015, the share of group contracts returned to the same level as in 2007. Meanwhile, figures have evolved without ever exceeding the ceiling of 15%. With the new modalities facilitating the change of insurance, the companies hope to cross this ceiling of glass.