Insurance companies: revenues in 2024 - 12 billion euros

Fitch Ratings forecasts

that in the medium term the insurance sector in Portugal will remain stable due to its financial strength. The Agency expects a modest growth in insurance revenues to around €12 billion by 2024. This growth will be driven mainly by inflation and related price adjustments.

Fitch points to several factors

that contribute to the profitability of the insurance sector by 2024, such as stable technical results, low number of incidents, positive investments and the impact of inflation on costs.

The main challenges for the Portuguese insurance sector this year are as follows

are macroeconomic, credit and market risks associated with investment portfolios. However, thanks to its "strong capital" and "strong loss absorbing capacity", the insurance sector has the ability to cope with these risks.

In addition to the "modest economic growth"

At 1.8%, Fitch cites falling purchasing power and low savings capacity as the main economic challenges. This is likely to reduce demand and sales of key products, including vehicle and real estate insurance, as well as savings and investment-oriented policies.

Fitch notes that the non-life insurance sector has remained resilient to external shocks, such as economic volatility during the COVID-19 pandemic and the associated increase in inflation.

As far as health care is concerned

Fitch expects the private healthcare sector to continue to grow in Portugal in 2024 due to increasing challenges in the national healthcare system. The agency notes that higher prices will allow health insurers to remain profitable despite a possible additional increase in claims costs. However, the profitability of this segment will continue to be weaker than the overall market.

Regarding accidents at work

It is expected that they will remain stable due to price indexing, while premiums may grow dynamically thanks to indexing and the stable economic situation in Portugal.

Insurance companies specializing in traditional guaranteed life products will continue to benefit from high interest rates, as their profitability is closely tied to investment activities.

The insurance sector in Portugal will remain stable due to its financial reliability, which is reflected in a solvency ratio of 200%. This provides a sufficient buffer to absorb market and credit risks in "stress" situations.