The Portuguese Insurance and Pension Funds Supervisory Authority published its 2025 sector report, showing continued growth in insurance activity, stronger profitability and improved capital coverage. Direct insurance production among undertakings under its prudential supervision rose 14.3% to nearly EUR 15.2 billion, while the aggregate technical result increased by EUR 120 million to EUR 851 million. Net profit reached EUR 653 million, up EUR 160 million, and the aggregate Solvency Capital Requirement and Minimum Capital Requirement coverage ratios strengthened to 211% and 556%, respectively. Pension fund assets increased 2.9% to EUR 19.9 billion, supported by 10.9% growth in defined contribution plan assets to EUR 2.163 billion, while defined benefit plan assets declined 1.6% to EUR 14.179 billion. Contributions rose 43.7%, and average defined benefit funding levels improved by about three percentage points to 107.8% under the funding scenario and 112.6% under the minimum value scenario. The report nevertheless identifies the limited number of pension plan participants as a constraint on supplementary retirement provision. Investment portfolios became more geographically diversified, with less concentration in domestic assets. The authority highlighted inflation, financial market volatility, geopolitical tensions, catastrophe protection gaps and digital operational resilience as continuing risks, including vulnerabilities arising from advanced artificial intelligence and cyberattacks.

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