There are many reasons why people don’t want insurance. The majority of people without home insurance said they simply don’t own anything of value, but at the same time, 16 percent of respondents mentioned that they don’t have enough money for home insurance.
For comparison, roughly 55 percent of real estate is insured in the Czech Republic, while in Western Europe it is over 90 percent.
However, what is particularly alarming is the fact that Czechs do not care much about their insurance policies, especially about the amount of the insurance amount. Only a third of Czechs with household insurance have a properly insured property.
A survey conducted in 2021 by the Kooperativa insurance company and the Ipsos agency shows that 41 percent of Czechs do not know the value of their property insurance. And only 42 percent of people have updated their policy in the last five years.
“Half of the insurance contracts were concluded before 2012, and every tenth one was never updated,” explains Milan Káňa, spokesperson for the insurance company Kooperativa.
If Czechs most often insure their households, on the other side of the spectrum we find insurance for the ability to repay a loan or mortgage or car insurance against theft. Both of these products are used by less than a fifth of the Czech population.
In the case of life insurance, almost a fifth of those who do not have it stated that they are not convinced that the insurance company would really pay them the promised amount in the event of an insurance event.
According to Jan Bojek, head of insurance development and sales at Česká spořitelna, Czechs like insurance, but they mistakenly confuse it with investing. “They often expect that the insurance will bring them a financial return, i.e. that the money invested in the insurance premium will be returned to them. The result can be dissatisfaction with insurance coverage and a deepening of general mistrust in insurance,” says Bojko.
According to OECD data, the share of collected insurance premiums in the Czech Republic is equal to 2.9 percent of GDP overall, which is the tenth lowest result in the 27 monitored European countries. The European average is 6.8 percent.
“However, a number of factors are reflected in the indicator of the total amount of insurance in individual countries, such as legislatively different tax regimes, the structure and maturity of the economy, the value of personal property or different pension systems. The level of insurance should therefore be taken with a grain of salt and each country assessed individually,” explains Tereza Hrtúsová, analyst at Česká spořitelna. In this connection, Milan Káňa, press spokesman for the insurance company Kooperativa, also pointed out the fact that there is no commercial health insurance in the Czech Republic.
However, interesting differences in the structure of insurance can also be observed between Czech regions. The largest number of insured persons are among the residents of Vysočina (97%) and the Karlovy Vary region (96%). On the contrary, 15 percent of the inhabitants of the Moravian-Silesian Region do not have any of the insurance policies.
Even greater differences then appear in what kind of insurance policies the residents of individual regions take out. For example, in the Czech context, the people of Prague take out travel insurance above average, but life and accident insurance below average. The situation is completely opposite in Vysočina, but also in the Hradec Králové region. In these regions, significantly fewer people use travel insurance, but more than half of the population here have taken out life insurance.
“Regional differences in types of insurance can be caused by the different needs of residents, their age, housing structure, financial literacy, but also by the structure of employment and the type of work performed,” says Tereza Hrtúsová. The degree of development of the market with companies and individuals who offer insurance policies to people will certainly have an influence.
Index of the financial health of the Czechs
Financial Health Index is a joint project of Česká spořitelna, the Institute of Sociology of the Academy of Sciences of the Czech Republic and the data portal Europe in data. Its goal is to continuously analyze the level of financial health of the Czech population in six areas:
- Financial reserve
- Saving for old age
- Risk insurance
- Housing costs
- Management overview
The project draws data primarily from regular sociological surveys of a representative sample of the population (data collection is carried out by the Ipsos agency) and data sources of the Institute of Sociology of the Academy of Sciences of the Czech Republic and Česká spořitelna. The Financial Health Index is part of long-term research Prosperity and Financial Health Indexwhich is implemented by Česká spořitelna and the data portal Europe in data.
Overall, the Czechs have a more prominent role of non-life insurance, i.e. they think more about their assets than the fact that an accident with permanent consequences may happen to them.
“In the Czech Republic, life insurance accounts for only 29% of the total premiums, that is, the total amount that people spend on insurance, which puts us at the bottom of the ranking. The average of OECD countries is roughly 50 percent,” confirms the Česká spořitelna analyst.