The size, sophistication and resilience of the Czech Republic's insurance sector means that it has more in common with its peers in Western Europe than with its counterparts in other countries in Central and Eastern Europe. It is dominated by composite insurers who see the Czech Republic as a core part of their regional operations: these companies have scale within the country (along with other advantages such as strong and well-established brands) as well as across Central and Eastern Europe. Nevertheless, competitive pressures in the non-life segment have caused penetration (ie, premiums as a percentage of GDP) to fall over recent years. In the life segment, it appears that every household that could potentially own policies is already doing so. Nevertheless, particular companies achieved strong growth in 2012 through the introduction of unit-linked products.

As of early 2013, the overall picture of the Czech insurance sector is one that has far more in common with those of developed Western European countries than with its peers in the varied countries of Central and Eastern Europe (CEE). The obvious strengths include the general resilience of premiums in both major segments despite a challenging financial and economic environment through 2012. The competitive landscape is dominated by (often multiple) subsidiaries of major multinational groups such as Vienna Insurance Group (VIG), Generali PPF Holding, Allianz and KBC. These companies have the benefits of scale within the Czech Republic and across Europe. For these four groups, the country is a core element of their complex businesses across CEE. There is also plenty of room for smaller insurers, many of which focus on niches.

However, the Czech Republic's insurance sector is not a cosy oligopoly. Competitive pressure remains intense, particularly in the motor-related lines that dominate the non-life segment. This caused overall nonlife premiums to decrease in H112. Non-life penetration, which is not at a particularly high level (and certainly not by the standards of developed Western European countries) has continued to fall. Conversely, health insurance is growing strongly. Both VIG and Genrali PPF Holding, which collectively account for well over half of all premiums written across both major segments, have been focusing on reorganising their businesses and cutting costs in order to boost profitability.

In the life segment, a significant challenge is that virtually all households that will ever use life insurance products are already doing so. In 2011 and H112, the total number of in-force policies continued to drop. Allianz, the only one of the larger life insurers active in the country to achieve double-digit growth in life premiums in H112 compared to H111, did so through the successful promotion of investment-linked products.

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