With less money in their pockets and fearing falling yields,tens of thousand Romanians have this year redeemed their lifeinsurance policies before maturity.
Life insurers paid redemptions totally worth 194m RON (47meuros) in the first six months alone, according to InsuranceSupervision Commission (CSA). Redeemed policies dropped by 13% froma year ago, but the decline is insignificant taking into accountthat policies redeemed in 2009 doubled compared with the previousyear.
The highest volume of redemptions before due date is registered onthe unit-linked insurance segment, where companies paid 118m RON(28.4m euros), from 135.6m RON in the first six months of2009.
Redemptions on the traditional insurance segment at the same timetotalled 75.6m RON, against 86.5m RON in the first half of 2009.Also, traditional policies account for 60% in gross premiumsunderwritten on the life insurance segment.
Theodor Alexandrescu, general manager of Alico (former AIG Life),says people cancelled their insurance policies both as they neededmore money, and as they feared a yield decline. However, there isalso a significant category of clients that did not urgently needmoney, but cancelled their policies to no longer pay premiums andimplicitly have more money in their pockets.
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