According to Theodor Alexandrescu, CEO of AIG Life, only agents who mainly sell unit-linked policies will see declines over the next few months. However, those who sell guaranteed life insurance, i.e. policies where the investment risk is borne by the insurer, and the profit is shared with the client, will stand to gain from the financial crisis, says the CEO of the second largest company on the Romanian life insurance market. "In times of economic growth, unit-linked insurance sells well, while in times of crisis, guaranteed life insurance sells better. Agents that sell only unit-linked policies will see declines over the next period, as the appetite for such policies is dwindling," Alexandrescu says. Over the last few years, unit-linked insurance policies (where the bulk of the sum paid by the insured is placed in investment funds) have seen a major growth, while a small part is used to cover the insured risk. For such policies, the investment risk is borne by the clients. This year, however, Romanians' appetite for unit-linked insurance has diminished due to the significant declines recorded by the funds attached to these policies, by over 50% against the end of last year.
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