AG2R La Mondiale is sticking its head above water in health and welfare insurance

A little respite for Bruno Angles. In the sights of the national leaders of several unions, in particular the CFE-CGC and the CGT whose confidence he has lost, the boss of AG2R La Mondiale announced this Tuesday a turning point in the financial results of the leading French social protection group.

The insurer with joint governance (union and employer) can be proud of a positive result at AG2R Prévoyance, a first in ten years for this health and welfare insurance entity for companies and professional sectors. Across the group, net profit reached 230 million euros, an increase of 4%.

Sharp increase in prices

“These are excellent results and we can collectively be very proud of the work achieved. The 2023 financial year marks the first year of the Nouvelle Donne business plan and the AG2R Prévoyance recovery plan, both adopted unanimously in 2022, declared to “Echos” Bruno Angles. The objective of this recovery plan is to overcome the risk of explosion of the group, identified in May 2022”, which marks the start of the mandate of the new general director.

Tensions are high between the different political and economic components of AG2R La Mondiale. With, at the top, joint governance which oversees the Agirc-Arrco supplementary pension and collective health and welfare activities. And a notch below, the mutualist governance of La Mondiale, a profitable company specializing in life insurance and additional (non-compulsory) retirement savings.

In detail, AG2R Prévoyance shows a net profit of 53 million euros in 2023, instead of a loss of 6 million initially forecast. This turnaround comes in part from the unprecedented increase in prices (8.5% in 2023, and another 7.7% in 2024). These prices drive the 13.5% growth in contributions collected, which reached 4.4 billion euros last year.

“We now charge the right price to professional branches and direct business customers,” explains Bruno Angles. We did not have massive attrition, in favor of competition, proof that we were suffering from chronic underpricing.”

Positive impact of the rise in pension rates

Two other elements played a role: the loss experience (death, disability, editor's note) “less strong than anticipated” in protection and the “positive impact” of the increase in interest rates on the accounts of AG2R Prévoyance, adds the manager , without however revealing the extent of the reversals of provisions.

For all health and welfare activities, which also include ViaSanté and Arpège Prévoyance, technical balance is in any case almost achieved. The combined ratio (claims and management fees on contributions collected) improved by 5.9 percentage points, to 100.4% at the end of 2023.

This indicator even turns green in foresight, at 95.9%. “This is proof that it is not inevitable to have a deficit in collective insurance,” believes Bruno Angles.

As for La Mondiale, the savings division, gross contributions (before redemptions) fell by 5.6%, to 6.6 billion euros. They still represent more than half of the group's total turnover of 11.6 billion euros (excluding Agirc-Arrco contributions). If retirement savings are doing well, asset savings (life insurance and capitalization contracts) show a net outflow of 2.1 billion euros.

“Positive in health and welfare, the rise in rates has a very negative impact on savings. We face competition from banking products, in particular from term accounts,” explains the boss of AG2R La Mondiale.

However, “La Mondiale remains the main economic engine of the group, as it has been for many years,” he adds. At first glance, the entity's net profit increased by 63%, to 437 million euros, thanks in particular to capital gains on the stock markets.

Recapitalization in sight for Domitys

But in reality, the difficulties of the senior residences operator Domitys are weighing on the accounts of La Mondiale, its 67% shareholder. Including Domitys, the Mondiale's result reached only 119 million euros, barely more than the 111 million euros for all health and welfare activities (AGR Prévoyance, Via Santé, etc.).

Domitys' losses increased from 10 million euros in 2022 to 161 million last year, including 65 million in depreciation for risks. La Mondiale also depreciated its stake in Domitys by 157 million euros.

“Today, the crisis in the real estate development market no longer masks the losses of certain residences, where the occupancy rate has not made it possible to achieve operating balance,” explains the boss of AG2R La Worldwide.

To rectify the situation, Olivier Wigniolle, former boss of Icade, took over as head of Domitys last May.“The recovery plan for 2027 will allow Domitys to make a new start,” says Bruno Angles. With several levers: “residence formats, opening to other sources of income, for example for swimming pools, and synergies with the rest of the AG2R La Mondiale group”.

In the meantime, Domitys shareholders are preparing “a substantial capital increase” and “La Mondiale will subscribe to it,” he promises.