The Bank of France published an analysis showing that French insurers and pension funds redirected investment flows toward debt securities and investment funds outside the money market in 2025 as rising long term interest rates increased their appeal. Total investments rose 5.4% to EUR 3,109 billion at year end, supported by stronger net acquisitions and valuation gains. Renewing bond portfolios improved average yields, although higher interest rates also reduced existing bond valuations. Net acquisitions increased to EUR 91 billion from EUR 55 billion in 2024, supported by life insurance inflows and growth in premiums for other insurance business. Debt securities attracted approximately EUR 50 billion, including EUR 23 billion into government bonds and EUR 20 billion into financial sector bonds. Non money market collective investment undertakings received EUR 42 billion, while money market funds recorded EUR 3 billion in outflows. Direct acquisitions of equities and ownership interests slowed to EUR 1.4 billion from EUR 14 billion, reflecting a shift toward indirect exposure through funds rather than an overall withdrawal from equities. The average yield on fixed rate bonds increased to 2.39% from 2.30% in 2024. Bonds remained the largest asset class, representing 55.7% of investments after looking through funds to their underlying holdings, down from 56.6%. Debt securities incurred EUR 8.5 billion in negative valuation effects, offset by gains elsewhere, particularly in investment funds and equities. Portfolios remained predominantly denominated in euros, with limited and stable foreign currency exposure. The average liquid asset ratio for life insurers and pension funds remained around 50%, while life insurance surrender rates declined.

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