IMPACT OF UNIT-LINKED INSURANCE ON DEVELOPMENT OF THE INSURANCE MARKET AND THE FINANCIAL MARKET IN THE REPUBLIC OF SERBIA

The subject of this paper is unit-linked insurance. Today, life insurance is considered an attractive savings and investment instrument and is not only a form of financial compensation when certain risks occur. Unitlinked insurance is most often marketed as an endowment insurance whereby policyholders could realise a higher return on invested funds compared to investments in various types of life insurance with a savings component. The investment risk based on these placements is not borne by an insurance company but by policyholders. The sum insured depends on investment results, however, based on the allocation of a part of the premium to cover the risk of death of the insured, a guaranteed minimum sum insured is provided by an insurer, which is not the case with independent investments on the financial market. Unit-linked insurance premiums are the main drivers of growth in total life insurance premiums in most European countries. With regard to experiences of European countries, the paper presents possibilities of faster growth and development of the financial market and the insurance market in the Republic of Serbia based on a larger placement of this life insurance type, which was insignificant until now.

Key words: life insurance, unit-linked insurance, financial crisis, financial market, insurance market