For more than 30 years, Lombard International Assurance has offered wealth management solutions based on Luxembourg life insurance 100% made up of unit-linked (UC). Mathieu Duballet, President of LIA Patrimoine, distribution entity of Lombard International Group in France, discusses the foundations and specificities of this investment medium
What are the characteristics of Luxembourg life insurance contracts?
Mathieu Duballet: In response to an increasingly complex and uncertain environment, wealthy families are looking for flexibility, stability and performance. They are aware that the risk exists, that the uncertainty exists, but all of this is managed and planned. Luxembourg life insurance is more relevant than ever in a context of rising interest rates and falling yields.
Internationally recognized as the most advanced wealth and estate planning tool today, it benefits from the stability and security offered by the Luxembourg regulatory framework (triangle of security and AAA country).
In addition to the possibility of structuring your assets and your tailor-made succession, the regulatory framework of Luxembourg life insurance offers the widest investment universe in Europe. It is a true investment platform that offers unparalleled flexibility, allowing investors to meet their return-seeking objectives. It is thus possible to diversify investment portfolios by integrating non-traditional assets such as private equity, real estate, private debt, etc. These asset classes now represent 14% of Lombard International Assurance’s assets under administration in Europe.
Within LIA Patrimoine, we marketed the offer of Lombard International Assurance, whose Luxembourg contracts are 100% unit-linked and in total open architecture, with partnerships with nearly 1,000 asset managers and more than 200 custodian banks.
Lombard International Assurance contracts make it possible to combine, within the same contract, discretionary management, advised management, free management, via a combination of Internal Collective Funds (ICF), Dedicated Internal Funds (IDF), or Specialized Insurance Companies (FAS).
How is taking out Luxembourg life insurance beneficial for French tax residents?
Mathieu Duballet: First of all, I would like to clarify that Luxembourg life insurance does not offer any particular tax advantage beyond the tax deferral, similar to what is found in France. It is not on this point that the Luxembourg offer differs.
2021 has been an excellent year, in line with previous years. Overall, the premiums collected on the French market by Luxembourg life insurance are up by +54% compared to 2020, of which 80% on unit-linked products (source ACA). This is not a new trend, the French market has been a strong growth market for 5 years already and remains the leading market for Luxembourg life insurance (45% of new premiums in 2021, source ACA).
The first half of 2022 was part of this same trend, with strong demand from our partners, on issues of asset allocation and financial engineering. What French customers seek in Luxembourg life insurance is a response to more sophisticated financial needs, for which they cannot find solutions in French life insurance.
We can clearly see that our partners are looking for different approaches to structuring the assets of their clients. Especially for asset allocation topics. Luxembourg life insurance is also recognized for its international portability, which makes it a perfect tool for customers with high mobility or whose family is dispersed in different countries.
What are your strengths and points of differentiation?
Mathieu Duballet: We work with all players in the wealth sector, from the wealth management advisor to the family office, via the custodian bank, asset managers or even tax lawyers and of course our own wealth engineers.
What makes us strong is our ability to bring together an arsenal of leading experts around the client to build a tailor-made unit-linked life insurance solution. This allows us to support our partners in the structuring of the simplest to the most complex cases, in the selection of players (management companies, custodian banks, etc.) and in complex calls for tenders, with international issues in particular. (we are present in more than 25 markets). It is therefore a real interprofessional collaboration.
But this success is also due to a strong choice of local location. Lombard International Group was among the very first players to create a local distribution entity in France, based in Paris. A team which has also grown last year and which will have doubled in size in one year with new recruitments this year.
We rely on a team of experts dedicated to the French market with a perfect knowledge of the market and local regulations. We also have unique expertise in Europe in the administration of non-traditional assets such as private equity.
Finally, since 2017, we have had a digital platform acclaimed by our partners: Connect. It is a real service platform that allows you to make 100% dematerialized subscriptions with electronic signature, but also to administer the insurance policy, to carry out redemptions and operations during its life. It is a tool that makes life easier for our partners and frees them up to focus on the development of their business and their clients’ issues. Today, more than 80% of subscriptions are carried out entirely dematerialized with electronic signature.