Portugal's Insurance and Pension Funds Supervisory Authority (ASF) published its semiannual Financial Stability Report for the insurance and pension fund sectors, covering developments through the third quarter of 2025 and incorporating end-2025 data where available. The report points to improved solvency and profitability in 2025, while flagging heightened macro-financial uncertainty and the early-2026 cluster of storms as key risk drivers. As of September 2025, insurers’ investment portfolios rose 5.9% from end-2024 to around EUR 55.2bn, while pension fund assets under management increased 1.1% to around EUR 19.5bn. Overall Solvency Capital Requirement coverage stood at 215.1% at September 2025 (213% at December 2025) and Minimum Capital Requirement coverage at 549% (557% at December 2025), alongside provisional 2025 net income of EUR 654m; Life direct business was expected to grow 16.4% in 2025, driven by 60.2% growth in unit-linked products, while Non-Life production was expected to rise by about 11% with an overall end-2025 loss ratio of 60.5%. Portfolio vulnerabilities highlighted include concentration in bond holdings around the lower boundary of investment grade (Credit Quality Step 3) and issuer concentration, with the five largest exposures accounting for about 40% to 50% of total investments; results in Fire and Other Damage are expected to come under pressure in 2026 from the 23 January to 13 February 2026 storm cluster, with insured losses potentially exceeding EUR 1bn before reinsurance, and with the Portuguese Association of Insurers reporting 180,000 claims and around EUR 1bn in paid and provisioned losses as of 26 March 2026. The report also sets out national results from the European Insurance and Occupational Pensions Authority’s 2025 stress test of institutions for occupational retirement provision, focused on liquidity risk over a 90-day horizon. In the Portuguese sample of seven pension funds (covering 60.6% of national assets under management), the yield-curve-up scenario reduced investment values by 20.9% and produced a negative aggregate liquidity position of EUR 122.2m, although reported management actions such as asset sales improved the position to EUR 54.9m; under the yield-curve-down scenario, the liquidity position was EUR -46.6m, improving to EUR 90.4m with management actions.
Portuguese Insurance Regulator (ASF) 2026-04-01
Portugal's Insurance and Pension Funds Supervisory Authority publishes financial stability report highlighting improved solvency and EUR 1bn-plus storm losses
Portugal's Insurance and Pension Funds Supervisory Authority (ASF) published its semiannual Financial Stability Report, highlighting improved solvency and profitability in 2025 but flagging heightened macro-financial uncertainty and the early-2026 storm cluster as key risks. Insurers’ Solvency Capital Requirement coverage stood at 215.1% at September 2025 and 213% at year-end, with provisional 2025 net income of EUR 654m. Portfolio vulnerabilities include concentration in lower investment grade bonds and issuer concentration, and storm-related insured losses could exceed EUR 1bn before reinsurance. The report also presents national results from the European Insurance and Occupational Pensions Authority’s 2025 stress test, where a sample of seven pension funds showed significant short-term liquidity shortfalls under both yield-curve-up and yield-curve-down scenarios, partially mitigated by management actions.