Aviva France fights back against "golden ticket" contract giving one French investor 68% returns

A life insurance certificate allows Max-Hervé George to trade on last week's prices

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Aviva France is fighting to stop one French investor from reaping up to 68% returns on a life insurance certificate that allows him to trade on last week's prices.

Aviva France believes the contract will be scrapped in court, a spokesman said. "Aviva France strongly contests this compensation claim and believes that the Court will rule against the speculative and excessive compensation levels being sought," he said.

Max-Hervé George received the contract, worth the equivalent of €8000, from his father when he was seven years old. It gives him the right to switch his investments between funds based on last week’s prices in what FT Alphaville called “the worst contract in the world”.

The certificate, bought by George's father as a gift, turned out to be a golden ticket that gives him returns of 68.6 per cent every year from 1997 to 2007, allowing him to amass a fortune that could buy him the insurance company itself.

Aviva France hit back at the idea that it could be bought, saying that it was appropriately reserved.

As of 2007, the family had €21 million, of which €1.4 million belongs to George. If that growth rate of 68.6 per cent continues, George’s €1.4 million fortune would now be worth €93 million.

George can “arbitrage time” by picking investments that have improved on last week’s prices. Even if his investments crash, he can move them into better stock at the price published the previous Friday.

Aviva France, the insurance company that stands behind the contract, has already lost multiple legal battles to get out of these terms. It is the victim of an old tradition of providing known prices to rich customers. The practice is a hangover from when it would take days for a switch in investments to be processed, in which time the market could move.

When the internet started to speed up the transmission of price changes in the nineties, Aviva France tried to sneak in new terms. It offered investors the equivalent of £10 to sign new papers. Almost all the contract holders did, apart from George. 

He has switched investments and added more money to the pot while watching his fortune grow exponentially over time. “I don’t want money, I just want my contract,” George told the FT.