Life & Non-Life Insurance Market in Czech Republic Market Size

Czech Republic Life & Non-Life Insurance Market Analysis

The life & non-life insurance market in the Czech Republic is estimated to record a CAGR of approximately 7% during the forecast period.

Total GWP increased by 19.9% from 2016 to 2019 with an annual 6.2% growth rate. The overall market growth will be relatively limited with the non-life segment expected to continue to grow in terms of premium volume, while the life segment faces a weaker demand soon. New insurTech companies could put pressure on the traditional players in the insurance sector. Both main subsectors of the industry had grown in business volume year over year until 2017. The life segment's GWP dropped by 3.0% in 2018 and by 3.8% in 2019, while that of the non-life segment increased significantly by 5.2% in 2018 and by 15.3% in 2019. Life GWP has been decreasing, which was caused by the market shift from the life savings business to life protection business and reduction in toxic business (primarily by some questionable brokers). Life savings business from the past was partly replaced by other savings products (primarily mutual funds) better suited for the purpose. As a result of these shifts, the overall retention and profitability of the life business have improved. The non-life growth rate was mainly driven by motor insurance products and by property insurance. The popularity of motor insurance products is mostly based on the increase of the Czech car market which registered a record high sales volumes between 2014 and 2017 however started to slightly decrease in 2018 and 2019.

The impact of COVID-19 on life insurance is mixed. The Czech insurance sector faces challenges from a downturn in the economy due to Covid-19 combined with significantly increased tax payments scheduled for 2021 and 2022. In order to improve solvency, Czech National Bank issued a strong recommendation to insurers that they avoid distributing any dividends that might impact their solvency position until the Covid-19 crisis is over, and according to our knowledge, all insurers decided to comply with this recommendation. One of the immediate impacts was in operational areas, where many insurers had to establish tools for online collaboration, both internal and external and provide their sales network tools to continue sales online. This sudden technology change opens the area for further insurtech innovations on the market, which we believe was not yet as well established as other fintech products.

There were 14 life insurers and 24 non-life insurers in the Czech Republic, 13 of which operated in both segments in 2019. The market is dominated by the Generali and Vienna Insurance Groups as both companies operate through multiple entities and control almost about two thirds of the market. Generali and VIG earned 58.9% of life insurance premiums and 58.6% of non-life insurance premiums.