Introduction

The French insurance market showed upward momentum in 2025. In life insurance, flows reached an exceptional level in the first half of 2025, with net inflows into redeemable products exceeding the amount collected for the whole of 2024, while in non-life insurance, the increase in premiums (+5.4%) exceeded that of claims (+2.3%), improving technical profitability. In addition, the average solvency ratio stood at 241% at the end of June 2025, reflecting the financial strength of players in the sector.

This favourable environment has nevertheless been the subject of several structural projects requiring particular attention from market players, notably:

• The revision of Solvency II with new governance, liquidity and sustainability requirements.
• The entry into force of the Digital Operational Resilience Act (DORA) and its 2025 technical standards, which impose a strengthened framework for digital operational resilience.
• Clarifications on certain expectations of the French Prudential Supervision and Resolution Authority (ACPR) regarding the distribution framework, including the extension of the duty to advise and increased marketing requirements, as well as recent debates on distribution from third countries.
• The ACPR continued supervision of the insurance sector, maintaining a high level of control and demonstrating its ongoing vigilance with regard to insurance companies.

In addition to an introduction on the macroeconomic situation of the insurance and reinsurance market in France, this article aims to summarise the main challenges for 2026.

Overview of the French Insurance Market

Life insurance: exceptional inflows driven by unit-linked products and pension products

According to the analysis of the “Situation of insurance in France in the first half of 2025”, published in November 2025 by the ACPR, in the first half of the year life insurance generated record gross inflows of EUR84.7 billion, a decline in redemptions and net inflows of EUR25.2 billion in the first half of 2025, with arbitrage in favour of unit-linked products. Redemptions fell by 11.2% and claims declined slightly.

This performance reflects several structural trends: the search for returns in an environment where interest rates remain attractive, a growing appetite for unit-linked products in a context of asset diversification, and the success of retirement savings schemes encouraged by the public authorities.

Improved technical profitability in non-life insurance

Non-life insurance premiums rose by 5.4%, while claims increased by 2.3%, bringing the net combined ratio to 95.9% at the end of June, reflecting an improvement in technical performance. However, motor repair costs are set to rise steadily over the 2022–2024 period, requiring particular vigilance in terms of pricing and claims management in this line of business.

Stable asset allocation

French insurers’ investments amounted to EUR2,738 billion at the end of June 2025, with a stable allocation, a high proportion of high-quality liquid assets and exposures mainly concentrated in France and the European Union. Net unrealised capital gains are positive across all investments.

This asset structure reflects prudent management and a preference for liquidity and credit quality, in line with the prudential requirements of Solvency II.

Solvency on the rise

The average solvency ratio stood at 241% at the end of June 2025, with different levels across segments: 231% for life and mixed insurers, 227% for bank insurance companies and 285% for non-life insurers. This improvement was seen across many sectors and affected all types of insurers in the first half of 2025.

These high solvency levels give French insurers the capacity to absorb shocks and the leeway to invest in digital transformation, regulatory compliance and commercial development.

Revised Solvency II: Proportionality, Sustainable Finance and Macroprudential

Challenges of transposition

Adopted on 27 November 2024, Directive (EU) 2025/2 amends the Solvency II Directive. It must be transposed by EU member states by 29 January 2027. The main changes introduced by this revision are as follows:

New method for extrapolating the yield curve for the use of market data

These technical adjustments aim to better reflect economic reality and avoid excessive volatility in capital requirements during periods of low or negative interest rates. For life insurers, these changes may have a significant impact on the calculation of the Solvency Capital Requirement (SCR) and the valuation of liabilities.

Change in the calculation of the risk margin and adjustment of the volatility adjustment calculation

These technical changes are intended to better calibrate technical provisions and reduce artificial volatility in the economic balance sheet. For life insurers, the recalibration of the Volatility Adjustment may improve SCR coverage in periods of credit spread stress.

Introduction of measures to support sustainable finance

Measures to support long-term investment are being introduced and a distinction between “brown” and “traditional” assets is being established. These provisions are intended to encourage insurers to finance the real economy and infrastructure, in line with the objectives of the Capital Markets Union.

Establishment of a proportionality regime and review of thresholds for exclusion from the scope of the directive

The revision introduces a four-level regime:

• Solvency I entities with an increase in the thresholds for applying the Solvency II regime.
• Entities benefiting from “small and non-complex” (SNC) status, allowing access to proportionality measures while remaining subject to Solvency II.
• Entities eligible for certain proportionality measures subject to authorisation by the ACPR.
• Entities that are too complex and significant to benefit from proportionality measures.

Automatic measures for SNC entities

SNC entities automatically benefit from a package of measures including the accumulation of key functions (excluding internal audit), a five-yearly review of policies, a biennial ORSA, an exemption from short-term LRMP, a simplified SFCR and an exemption from prudential audit of the SFCR.

The SNC criteria are cumulative and relate to thresholds for premiums and technical provisions, an SCR ratio, a share of long-term and savings products, a structure by non-life branches, SCR coverage of more than 100% and an average combined ratio of less than 100%.

A notification process is planned, with ACPR oversight and the possibility of opposition in the event of ineffective governance or SCR risk.

Authorisation measures for eligible non-SNC entities

Non-SNC entities may request proportionality measures subject to authorisation by the ACPR, provided they comply with general conditions (risk resistance, technical provision and premium thresholds, model complexity, governance) and specific criteria for each measure (spaced RSR/ORSA, short-term LRMP, deterministic calculation of Best Estimate, overlapping of key functions).

Operational timetable

SNC notifications and authorisation requests may be submitted from 30 January 2027. In 2025, the European Insurance and Occupational Pensions Authority (EIOPA) published a technical opinion approving the SNC criteria and specifying the conditions for granting measures beyond the SNC.

For small or medium-sized players wishing to establish themselves in France, eligibility for SNC status or proportionality measures upon authorisation can be a significant competitive advantage, reducing administrative burdens and compliance costs.

The ACPR has already organised a webinar in October 2025 to familiarise the market with the new proportionality regime and has sent a questionnaire to insurance and reinsurance undertakings to gather their initial impressions.

In line with this:

• The ACPR plans to specify the practical details of this new regime in 2026 in order to provide clarity for undertakings and offer them the opportunity to submit blank applications in the last quarter of the year to facilitate authorisations as of 2027.
• It has provided an email address to deal with questions related to this new regime and to support undertakings in its implementation.

DORA: Digital Operational Resilience

Entry into force and key obligations

European Regulation 2022/2554 of 14 December 2022 on the digital operational resilience of the financial sector (DORA) came into force on 17 January 2025.

As a reminder, the requirements of this regulation apply, with some exceptions, to all entities in the financial sector and concern:

• IT risk management: Including appropriate governance, an appropriate risk management framework and harmonised technical resilience measures.
• Incident reporting: A requirement to report major incidents, encouraging all entities to implement an effective incident detection process, enabling greater responsiveness by the authorities in the event of a critical incident.
• Resilience testing: A proportionate testing programme with, for the most important entities, monitoring by the competent authority of threat-based intrusion tests.
• Third-party risk management by IT service providers: A new framework for monitoring critical ICT service providers which, by ensuring greater resilience of these third parties, should also increase the resilience of financial sector entities.

At European level, all Level 2 texts have been adopted, with a review clause on 17 January 2028. At the French level, the adoption of the “Resilience law” (loi de résilience) (transposing Directive (EU) 2022/2556) and its transposition into regulations is expected by the end of the year. Regardless of the enactment of this law, the DORA Regulation applies, as it stands, to the entities referred to in Article 2 of that Regulation since 17 January 2025.

Support from the ACPR

The ACPR has issued numerous communications, documents and instructions to help stakeholders comply with the new regulatory framework. Key elements include:

• In January 2025, the ACPR published an initial set of frequently asked questions (FAQs) on DORA, as well as an outsourcing declaration form for reporting major ICT incidents.
• On 25 March 2025, the ACPR updated these FAQs to clarify, in particular:
1. The procedures for submitting the information register (register of ICT service providers/external suppliers), with a summary table specifying the scope of submission (single entity or consolidation, scope of subsidiaries, etc).
2. Resilience tests, in particular threat-led penetration testing (TLPT): The ACPR specifies that the list of entities subject to TLPT will not be published — the competent authorities will contact each entity concerned directly by mail after the delegated regulation on TLPT comes into force.
• The ACPR has updated its guidance note on “Disclosure of information to the supervisory authority and information for the public (RSR/SFCR) for insurance undertakings and groups subject to the Solvency II Directive”.
• In practical terms, for entities supervised in France, the first transmission of the information register of their ICT service providers was due to take place no later than 15 April 2025.

Situation nine months after DORA came into force

The Fintech Forum held on 9 October 2025 by the ACPR and the Financial Markets Authority (AMF) discussed the implementation of the DORA regulation. In this context, the ACPR and AMF noted in particular:

Regarding incident reporting

(a) Profile of reporting entities

The notifying entities are mainly credit institutions (32% non-SI and 17% SI) and insurance companies (19%).

The insurance sector is therefore the second largest category of entities to have reported major incidents since DORA came into force, reflecting significant exposure to ICT risks.

More specifically, it was shown that notifications come from:

• Insurance and reinsurance undertakings.
• Insurance intermediaries, reinsurance intermediaries and ancillary insurance intermediaries

(b) Types of incidents reported

Although the data is not broken down specifically by sector, the types of incidents reported by all financial entities (including insurance companies) are mainly IT failures, with 28 cybersecurity incidents, 21 process failures, 14 system failures, 12 payment-related incidents and nine external events. The figure for cyber incidents is high due to one incident that affected several entities.

(c) Third-party involvement

In more than half of the cases, third parties were involved (significant impact of the Harvest incident), highlighting the importance of managing risks related to ICT service providers for the insurance sector.

Regarding challenges

(a) Notification deadlines

An incident must be reported within a maximum of four hours after being classified as major, and within a maximum of 24 hours after detection. These deadlines are still rarely met.

(b) Submission format

The Json format and submissions on OneGate pose problems with “homemade” internal tools and a lack of anticipation regarding accreditations.

The ACPR and AMF have noted that certain mandatory fields are not being filled in or are being filled in incorrectly.

(c) Information register (RoI)

84% of entities submitted data to Onegate, but only 39% of them had their RoI processed at European level.

Explanatory factors include:

• A very tight schedule for all parties involved.
• Unstable validation rules that were modified during the submission period by the competent authorities, as well as an unusually high volume of technical support requests.
• An unusual submission format that required a level of familiarisation that was sometimes underestimated by submitters (low participation in the dry run exercise, low use of the test environment, failure to anticipate the extent of internal governance required).

Regarding the next steps for the insurance sector

(a) Support in 2025

Support was provided to all financial entities in 2025, including numerous presentations to market participants since October 2024, technical support responding to more than 700 questions, the organisation of bilateral meetings when necessary, and the creation of an FAQ list that was updated several times.

(b) Enhanced supervision from 2026

As of 2026, enhanced supervision will be put in place with the identification of control priorities based on the ESRs conducted by the control services, the conclusions drawn from the analysis of responses to the cross-sectoral questionnaire on the implementation of DORA, the quality of the RoIs and the initial conclusions drawn from horizontal analyses, as well as notifications of major incidents.

This will include the launch of cross-sectoral and trans-sectoral analyses, as well as on-site inspections for the most at-risk entities.

Thus, it reveals that the insurance sector accounts for 19% of entities that have reported major incidents since DORA came into force, making it the second most affected sector after credit institutions. Insurance and reinsurance companies and intermediaries face the same challenges as other financial entities, particularly in terms of meeting notification deadlines, submitting ROIs and managing risks related to third-party service providers. The authorities plan to strengthen their supervision from 2026 onwards, with targeted checks on the most at-risk entities.

Supervisory Findings and Expectations of the ACPR: Duty to Advise, Distribution and Customer Protection

Extension and strengthening of the duty to advise

The ACPR recommendation of 21 November 2024 sets out the best practices that all distributors of insurance products must comply with in terms of their duty to provide advice, both before the policy is taken out and throughout the life of the contract (in particular with regard to gathering and taking into account information about the customer’s interests in terms of sustainability and their preferences in this area, and informing them accordingly). In addition, contact frequencies are recommended for life insurance (on the occasion of significant payments or surrenders, or failing that, every two to four years) and non-life insurance (on a periodic basis) in order to verify that the contract is appropriate to the customer’s needs.

In this context, the ACPR reiterated in 2025 that the duty to provide advice now extends to all insurance products and must take into account customers’ preferences in terms of sustainability, in line with the EIOPA guide.

This recommendation is fully applicable to insurance sector players from 31 December 2025.

Supervisory findings on the information provided

The ACPR’s checks on funeral and affinity contracts revealed a lack of contractual information, insufficient transparency on fees and often standardised and inadequate advice, which led the ACPR to set out clear expectations for improvement.

In health insurance, the ACPR found deficiencies in information (incomplete, late), insufficient transparency on remuneration, claims management and mediation. Mystery visits to the telephony sector highlighted poor identification of needs and incomplete information on guarantees and exclusions.

Value for money

At its “Banking and Insurance Customer Protection Morning” in March 2025, the ACPR noted the “low added value of products”. In particular, in the context of non-bank insurance, where the claims/premiums ratio is very low (between 1% and 20%) with very high distribution commissions (from 40% to 80%) for low claim frequencies (less than 1% or even 0%) and sometimes high refusal rates (between 50% and 75%).

In this context, the ACPR reiterated the need for industry players to take greater account of the customer’s interests when designing, distributing and monitoring products, particularly in light of the “product governance” obligations to which insurers are subject.

In this regard, Jean-Paul Faugère, Vice-President of the ACPR, reiterated in his opening speech that:

“[...] this is not about reviving price controls for the benefit of a managed economy [...].

The fact remains that the supervisor, regardless of any European standards, in other words with or without RIS [Retail Investment Strategy], has a general duty to protect customers and, as such, must assess whether the asymmetry of information between the professional and the public creates a vulnerability to the detriment of the customer. [...]

[…] there are some S/P ratios that are so low that discussion is no longer relevant. This is the case for certain affinity insurance policies or para-banking products, with S/P ratios of a few per cent. The same applies when the commission rate exceeds 75% or the claim refusal rate exceeds 50%. In these cases, has the cover been overestimated by the customer, or was the customer really aware of the existence of the warranty? […]

In summary, it seems to me that the S/P of a product line must naturally be monitored, not only because from a prudential point of view it cannot lead to a combined ratio that is consistently higher than 100%, but also because, for consumer product lines, it cannot be sustainably below 30% without a detailed assessment by management, in order to prevent any marketing that could not be justified by the customer’s interest. […]”

Distribution From Third Countries and Vigilance by the ACPR

Reminder of the prohibition and responsibility of manufacturers

On 15 September 2025, the ACPR published a press release on telephone canvassing outside the European Economic Area (EEA), setting out the authority’s particularly strict position, which is likely to have a significant impact on distributors of insurance products in France.

The ACPR states that checks carried out since 2023 have revealed that some insurance intermediaries are inappropriately using structures established outside the EEA to market insurance contracts covering risks located in France. Two main patterns have been identified: firstly, intermediaries registered in France using branches located in third countries to distribute contracts, even though these branches should primarily serve the local market where they are established; and secondly, the use of call centres operated by companies located outside the EEA, particularly in health and affinity insurance, which illegally carry out distribution activities reserved for intermediaries registered in France or in another EEA member state. These practices are said to have led to numerous regulatory breaches and complaints, including aggressive commercial practices, the abusive reclassification of unsolicited calls, gaps in the information provided to customers and the absence of audit trails.

In this regard, the ACPR points out that the Insurance Distribution Directive, transposed in the EEA, requires intermediaries to be registered in the member state where they have their registered office or residence, in accordance with Articles L.512-1 and R.512-1 of the Insurance Code. Consequently, a company established outside the EEA operating a call centre is not authorised to distribute insurance contracts for risks located in France. Similarly, a branch of an intermediary registered in France and located in a third country may not be used to distribute such contracts, at the risk of undermining the principle of territoriality of distribution and preventing effective supervision by the competent authorities.

In this context, the ACPR has emphasised the central role of the various players in compliance control. Network intermediaries (wholesale brokers) must ensure that their partners comply with the conditions for access and professional practice, do not distribute illegally from a third country and do not make abusive use of branches outside the EEA, by putting in place rigorous control and audit mechanisms. Insurers, as product manufacturers, and network facilitators, when they are co-manufacturers, bear a central responsibility for the compliance of the marketing strategy and must rigorously manage the identification, measurement, monitoring and control of compliance risks at all stages of the distribution chain, including those resulting from the actions of their partners.

Legal scholars have repeatedly pointed out that the ACPR’s position appears to be particularly strict and more demanding than EIOPA’s Supervisory Statement. EIOPA did not appear to prohibit the use of branches located abroad, provided that, in accordance with its recommendations, real activity was maintained within the intermediary registered in the territory of the member state concerned.

In this regard, practitioners indicate the absence of an explicit legal basis and the history of the position taken by the French Insurance and Mutuality Insurance Supervisory Authority (ACPR) in 2008, which validated such a scheme, to challenge a general prohibition on distribution from third countries.

Nevertheless, the ACPR does appear to be strengthening its expectations regarding the control of distribution networks by product manufacturers.

Supervision of the Insurance Sector

In 2025, the ACPR continued to supervise the insurance sector and maintain a high level of control, demonstrating its ongoing vigilance with regard to insurance companies.

On-site inspections highlighted an increase in controls targeting non-life insurance products, particularly in terms of product design, marketing, and information provided to policyholders. This development reflects an increased focus on operational risks and consumer protection in these segments.

At the same time, the fight against money laundering and terrorist financing (AML-CFT) remains a priority and constant theme of the ACPR’s inspections. Vigilance, customer knowledge and suspicious transaction reporting systems continue to be subject to in-depth review.

Finally, 2025 saw new sanctions imposed by the DGCCRF (Direction générale de la concurrence, de la consummation et de la repression des frauds), which penalised four banks for violating the legal deadlines in the process of substituting borrower insurance.

Conclusion

Carrying out insurance or reinsurance activities in France requires taking into account increased compliance with revised Solvency II (proportionality, liquidity, sustainability, reporting and auditing), the implementation of DORA (ICT governance, register and notifications), the demonstration of robust value for money, and paying particular attention to the compliance of the distribution system.

Buoyed by favourable macroeconomic indicators, the French market remains attractive but calls for greater maturity in terms of sustainability risks and enhanced operational and commercial discipline. The ACPR’s detailed expectations in terms of best practices provide a concrete roadmap for sustainable and compliant implementation.