Unit-Linked Strategy of the Development of the Serbian Life-Insurance Market

Abstract

The aim of the paper is to show the way how the law should be changed to ensure the conditions that are
necessary in further development of the serbian life insurance market based on unit-linked products. In the analysis are
used statistical method and method of comparison. Life-insurance products are often treated not only as a view of
protection against risk but also as a form of saving and accumulating of financial resources. It is enough to concider
the share of endowment premiums in Serbia (these products inculde a protection and a saving component,too) which is
almost 50% by the end of 2017, while the biggest increase in the past few years is reachen with insurance in the case
of survival (which have a saving component only). So, in Serbia, just like on the developed markets, a dominating
role have products with a saving and protection components. If we concider the european markets it can be shown thet
unit-linked products have a main role. Until the financial crysis in 2007. these products were the leaders of the
increase of life premiums. A lack of serbian market is that unit-linked products can be launched only from the year
2014 according to the definitions of the new Insurance law. As a result until now unit-linked products are launched
only by two serbian companies: Generali and Wiener.
The main characteristic of these products is that the insured can choose the fund in which the resources will be
invested, and according to this, he bears the risks, too. It is important to say, in Serbia there is a little number of
management companies with only a few investment funds. Restricitons are made by the law,too. It is defined that
financial resources must be invested at least into two funds. Important characteristic of unit-linked products are
transparency and that the informations about the cost structure of the product are public. The serbian market doesn’t
meet the criteriums in the availability of informations. Often, cunsomers have to inform directly from the sellers who
are interested in the selling of the product not to inform clients appropiately.
It is evident that strategy of further development of the serbian life-insurance market has to depend on unit-linked
products. In order to unit-linked products be launched by more companies it is necessary to provide better conditions
for process of the establishing of investment funds and for the informations about the most important characteristics of
life-insurance products, mainly about the cost structure.