The first GenZ Literacy Index reveals a gap between knowledge and action
Understanding insurance is one thing, knowing how to use it in real life is another.
We have just launched the first Gen Z Insurance Literacy Index in the Baltics and Poland, and the results reveal a worrying reality: while many young people understand the basic idea of insurance, far fewer feel confident applying that knowledge in real life
A moderate understanding that signals a deeper issue
In Latvia, the GenZ Insurance Literacy Index stands at just 44 out of 100. This places young people aged 13 to 21 within a moderate range yet uncomfortably close to low literacy levels.
The trend is consistent across the region. Lithuania matches Latvia at 44, Estonia scores slightly lower (42), and Poland leads with 47 – the highest result in the study, but still indicative of only moderate understanding.
These results point not just to a knowledge gap, but to a broader challenge: young people are not yet equipped to confidently navigate real-life risk-related decisions.
Knowledge exists, but confidence and action are lacking
A deeper look at the data reveals a striking imbalance. In Latvia, theoretical knowledge score reach 59 points, while practical skills and decision-making ability lag significantly behind at just 27.
More than 30% of young people admit they would not be able to explain the essence of insurance to a friend. This suggests that while awareness exists, it is not supported by confidence or real-world understanding.
Across all surveyed countries, the weakest results appear in the dimension measuring behaviour and practical skills such as choosing the right policy or submitting a claim. Similar gaps are observed in Lithuania (29), Poland (25), and Estonia (23).
Why insurance still feels “not for me”
One of the key reasons behind this gap lies in perception. Many young people still view insurance as something relevant only to adults associated with owning property, cars, or other valuable assets.
In addition, persistent myths continue to shape attitudes: that insurance is complex, expensive, and not applicable to everyday life.
However, reality tells a different story. Young people encounter risks regularly – at school, during sports activities, or while traveling. Everyday situations can lead to
unexpected financial consequences, where insurance could play a critical role in reducing stress and financial burden.
As Jānis Lucaus, CEO of Balcia, explains: “In societies with high financial literacy, taking responsibility for damage caused to others is considered self-evident even in everyday situations. Insurance serves as a safety net that helps families avoid unnecessary financial strain.”
The role of values and early education
According to experts, the gap between knowledge and action is not surprising. Young people are less likely to think about risk protection when they do not yet own assets or carry financial responsibility.
However, this also reflects a broader societal pattern. Value is often associated with material possessions rather than health, responsibility, or financial resilience.
Māris Krastiņš, lecturer in Risk Management and Insurance at the University of Latvia, highlights this perspective: theoretical knowledge among young people significantly exceeds their ability to apply it in practice. Strengthening awareness of non-material values such as responsibility and personal well-being should therefore become a key focus, including school programs.
From awareness to real-life application
Importantly, the study does not indicate resistance or negative attitudes toward insurance. On the contrary young people recognize its importance. The real challenge lies in bridging the gap between awareness and application.
This requires a shift in approach from theoretical explanations to practical, experience-based learning. Experts emphasize the importance of real-life scenarios: understanding how to choose a policy, interpret its terms, and act when an incident occurs.
One proposed solution is introducing hands-on learning initiatives, where students simulate the full insurance process from selecting coverage to submitting claims.
Meeting young people where they are
To address this gap, we are already investing in initiatives designed to engage young audiences in a relevant and accessible way.
One example is the digital platform, which provides interactive and easy-to-understand educational content tailored to young people. We also plan to expand collaboration with schools and develop practical learning materials for both classroom and independent use.
This approach reflects a simple principle: to be effective, education must be delivered in a format and language that resonates with its audience.
Why this matters now
The importance of insurance literacy is growing as young people encounter real-life responsibilities earlier than ever.
From the age of 16, for example, regulations related to electric scooter insurance already bring young people into the insurance ecosystem. Combined with first independent travel experiences, rental agreements, and financial decisions, the need for practical understanding becomes immediate.
As Jānis Lucaus notes: “We have both the opportunity and the responsibility to help young people develop the knowledge and confidence needed to make informed financial and risk-related decisions.”
Closing the gap
The findings of the GenZ Insurance Literacy Index offer more than just insight they provide direction. Young people already understand the basics - the next step is to empower them to act.
Bridging this gap will require clear communication, practical education, and a commitment to making insurance relevant in everyday life. Because ultimately, insurance is not just about policies it is about confidence and security when the unexpected happens.
We want to give young people the confidence to explore, try new things, and live fully with insurance that actually makes sense. Know someone who should be covered? Share it with them.
👉Latvia - www.kastevipiesedz.lv
👉Lithuania - www.kastavesaugo.lt
👉Estonia - www.katamind.ee
👉 Poland - www.ktociekryje.pl