The Portuguese Insurance Regulator (ASF) issued its semiannual Insurance Sector Risk Dashboard for September 2025, keeping macroeconomic and credit risks at a medium-high level, maintaining market risk at medium-high but on a downward trajectory, and revising liquidity risk down to low. Profitability and solvency risks stayed at medium-low, while life-specific risks remained medium-low and non-life-specific risks continued at medium-high. Macroeconomic risks were framed by a softening of the European Central Bank’s contractionary policy stance and reduced uncertainty around European Union–United States trade tariffs, although the agreed 15% customs tariff level was noted as historically high and its effects remain to be assessed. Credit risk remained medium-high amid broadly lower sovereign risk premia between March and October 2025, except for a slight increase for France, and stabilised risk premia for financial and non-financial issuers following April increases. Market risk eased after heightened volatility in March and April linked to US tariff measures, with a subsequent decline that was more pronounced in bond markets, while Portugal’s real estate market recorded an annualised return of 17.2% in June 2025; ASF nevertheless flagged a material risk of a sharp correction in asset prices. Liquidity indicators improved, reflecting a higher inflows-to-outflows ratio and a moderately stronger asset liquidity ratio. Sector profitability was supported by improved technical results in both life and non-life business and higher return on equity versus the prior-year period, with the solvency capital requirement coverage ratio remaining around 210%; however, ASF noted that accounting-based indicators from 2023 onwards reflect the adoption of IFRS 17 and may not be directly comparable with earlier data. Interconnections risk stayed medium-low with a slight increase in investments in securities issued by banks, insurers, and pension fund management companies, and no material changes in concentration. For non-life business, ASF highlighted continuing production growth alongside slight reductions in loss ratios, mixed expense ratio developments by line of business, and potential tariff-related pressures on claims costs and profitability.

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