Should we allow, in the context of a mortgage, to change borrower insurance (which is most often required to obtain a loan) at any time? Beyond its technical and particular nature, the question decisively raises a much more general and far too ignored reality.
Since 2010, several provisions have forced banks to open up to competition borrower insurance linked to real estate loans. Contracts can therefore now be terminated annually. However, last month, the National Assembly voted in the first reading a bill authorizing the infra-annual termination, therefore at any time, of borrower insurance. What is the stake of such a provision? The promoters of the law speak of respect for the consumer and argue that this is a measure of purchasing power that does not cost the state one euro.
Truly? It is estimated that the measure could generate savings for borrowers ranging from 5,000 to 15,000 € over the total duration of the contracts. Or, compared to the average loan term, a saving of € 250 to € 750 per year, which may seem like fairly symbolic restitution of purchasing power compared to the acquisition of real estate.
Towards a demutualization of risks
In fact, the issue concerns banks and insurers much more seriously. Banks have of course every interest in selling borrowers insurance, which they are accused of overcharging the premiums. While insurers could get their hands on a market of 7 billion euros per year.
Who to believe? Before entering the debate, it seems important to understand the arguments of the banks in this case.
They believe, in fact, that the possibility of permanent termination will lead to demutualization of risks, with à la carte coverage which will result in higher premiums for the less fortunate. The argument was swept aside by the deputies. However, even if it is not easy to gain admission in France, the banks may well be right. But it is still a matter of hearing what they are saying. Because what does this “mutualization of risks” mean? Quite simply, the best risks pay for the less good, who thus have easier access to credit.
To mark it (but without saying it exactly), Crédit Mutuel recently took an unexpected initiative: removing (for loyal customers) the medical questionnaires and therefore any additional premiums linked to a risky state of health for the granting of mortgage loans. . The pooling of policyholders will thus be even stronger.
Many unprofitable customers at banks
In the face of this, insurers can only defend the truth of prices and premiums. But what will it mean? That those who borrow with the greatest ease, the young and well-off profiles in particular, will be constantly canvassed and will make some savings, when the others will see, compared to the current situation, their premiums undoubtedly increase!
Yes, when the Federation of French banks defends the current system of loan insurance under “solidarity”, it is not totally wrong.
In fact – and this remains far too unnoticed – this situation is fairly general in France in banking services. A long way from a time when banks were quasi-public, their services and prices do not distinguish or hardly distinguish users according to their profitability; as in other countries where banking tariffs are highly modulated according to the amounts of deposits, for example, or the subscription to certain expensive services. In fact, in France, a large number of bank customers, and generally not the wealthiest, are not very profitable, if at all. But there is a mutualization of costs: others pay in a way for them. In what way it is a question of knowing well what one aims when one speaks about the truth of the prices.
