Czechs often have bad insurance policies, according to the survey. They don’t trust insurance companies and they lack money

According to data from the Organization for Economic Cooperation and Development (OECD), Czechs spend 2.9 percent of Czech GDP on insurance. This is the tenth lowest result in Europe. The European average is 6.8 percent.

Most often, people insure their household, 61 percent of the Czech population uses such a service. On the other hand, the least popular is car insurance against theft or insurance of the ability to repay a loan or mortgage, less than a fifth of people use these products.

The insurance is mainly taken out by the older generation. “People over 50 use it more often than younger people. This applies to almost all types of products. However, this difference is most noticeable in liability insurance, which is held by 12 percent of people in the 18 to 29 age group, while in the 50 to 65 age group this share is 37 percent,” said Europe in Data analyst Milan Mařík.

One of the main factors that influence how people get insurance is their income. “Low-income households and households without long-term reserves take out significantly less insurance. This is related to the fact that they cannot afford insurance and it is unaffordable for them,” said Kamila Fialová, an economist from the Institute of Sociology of the Academy of Sciences of the Czech Republic.

Another factor is the low financial literacy of the Czechs. This is related to the fact that Czechs confuse insurance with investing. “People often expect that insurance will bring them a financial return, i.e. that the money they invested in insurance premiums will be returned to them. The result can be dissatisfaction with insurance coverage and a deepening of general mistrust in insurance,” said Jan Bojko, head of insurance development and sales at the savings bank.

According to the analysis of the Institute of Sociology of the Academy of Sciences of the Czech Republic, an important motive for arranging insurance is the effort to reduce risks and avoid possible loss. This is how 48 percent of people justified home insurance and 40 percent of life insurance.

A more prominent role of non-life insurance is typical for the Czechs, they think more about their property than about the possibility of an accident with permanent consequences. In the Czech Republic, life insurance accounts for 29 percent of the total amount that people spend on insurance. The average of OECD countries is 50 percent, pointed out Česká spořitelna analyst Tereza Hrtúsová.

The financial health of the Czechs improved slightly after several months of deterioration. The share of those who easily manage their income increased by six percentage points to 46 percent. The proportion of people who now have to reach into their savings at the end of the month has decreased by five percentage points. At the same time, however, the share of those whose income is sufficient only with great difficulty has slightly increased.