French insurers under pressure after 2012 outflows
* Struggle to stay attractive in tough savings market
* Rival guaranteed bank deposits see record inflow
* 2013 is going to be "better" for insurers - analyst
PARIS, Jan 24 (Reuters) - French insurers such as AXA and CNP saw net outflows in 2012 for the first time in a decade, according to industry data, as low interest rates and competition from banks took their toll.
Life insurance is a 1.3 trillion euro ($1.7 trillion) industry in France, luring risk-averse savers with guarantees and beneficial tax treatment.
However, it has struggled to retain its attractiveness at a time of ultra-low interest rates, rivalry from bank deposit accounts and uncertainty over tax rates.
French life insurers lost an estimated 3.4 billion euros in net fund flows in 2012, compared with inflows of 7.7 billion in 2011, the FFSA industry association said. Between 2003 and 2010 the industry saw annual inflows of around 30 to 50 billion.
Meanwhile, inflows into guaranteed bank deposit products Livret A and LDD - most of which end up going to state bank Caisse des Depots for reinvestment in public projects - hit a record 49.2 billion euros, the FFSA said.
This was largely due to French President Francois Hollande's decision to hike the maximum amount that can be invested in the Livret A, as well as the product's tax-free guaranteed return of 2.25 percent until February 2013.
With this return set to fall to 1.75 percent, and with uncertainty fading over taxation, the outlook for 2013 is slightly brighter, said a London-based analyst.
"We knew it had been a bad year," the analyst said. "2013 is going to be better."
Shares in AXA and CNP were trading flat at 1018 GMT, with the STOXX 600 insurance index also flat. AXA is up 20 percent over the past year, in line with the index, while CNP is up 10 percent.
($1 = 0.7530 euro) (Reporting by Lionel Laurent; Editing by Mark Potter)