Do you know your risks?
The high willingness to take risks also leads to a lower assessment that risks will happen. "I'm careful, nothing will happen to me" is the most common response from 18- to 29-year-olds in a study on risk competence done by Gallup International on behalf of the Vienna Insurance Group. A total of 9,000 people were surveyed in nine countries in the CEE region, around a third of them between the ages of 18 and 29.
The aim of the study was to analyse how intensively people perceive the most common risks of modern life, how they assess their probability of occurrence, what damage they expect and whether they have sufficient coping strategies. The following risks were used to assess risk competence: illnesses and accidents with serious consequences, occupational disability, damage to residential property, self-inflicted accidents, and cybercrime.
Hoping for luck
The study confirms that young adults are naturally more willing to take risks. Two-thirds of 18- to 29-year-olds express a medium to very high willingness to take risks. Over 60% rate the probability of risks occurring as low. More than a third hope to be lucky in the face of the threats surveyed, particularly when it comes to the risk of serious illness and accidents.
But why should a young person worry about risks and their possible consequences if they first want to build up and enjoy their life?
Firstly, there is the emotional component. The study shows that young people react more sensitively when confronted with risks than older people. They have no experience of it and the idea of potential threats worries them far more than older generations.
On the other hand, young people today are confronted with a multitude of problem areas. They are in a challenging phase of life, still lack self-confidence due to little experience and, according to the study, are more nervous (60%) when they think about their current affairs than "older people" (49%).
The state should pay
Particularly striking is the fact that two thirds of those surveyed are not aware of the risks of modern life and therefore lack risk competence and therefore usually do not know whether and how they should take precautions against risks. This also correlates with a lack of financial knowledge, which is emphasised by the most frequent statement in the study: "I don't know enough about what to do when it comes to risk provisioning".
On the one hand, young people are less concerned about possible risks and on the other hand, it is due to a lack of knowledge about how to make provisions for them, even if they consider the financial losses to be high in some cases. However, it is then expected or assumed that the state or society will pay for it. From the point of view of the younger generation, responsibility for the financial consequences of loss events should be delegated to the state even more than it is currently the case. The proportion of young people who rely on state support in the event of damage is highest in Austria at 65%. The greater the expected damage, the greater the expectation that the state will step in. A fallacy that does not keep pace with reality. Here are two examples. Anyone who suffers a leisure accident with permanent consequences will not receive a single cent from the state in Austria. Incidentally, this applies to both young and old. Anyone who becomes unemployable for work at a young age only receives a very low minimum level of state cover due to a lack of contribution periods.
Risk literacy as a question of education
The young generation is particularly challenged to be able to make informed decisions when dealing with the resulting risks, especially regarding major issues and threats such as the climate crisis. Greater risk awareness and an increase in risk competence would be the objective. An effective approach would be to integrate risk literacy into the education system and provide active support from competent financial services partners. The Vienna Insurance Group has therefore set itself the goal of actively implementing measures to increase risk literacy in its markets. After all, only those who have sufficient knowledge to know their risks can assess them correctly.