In terms of gross written premiums (GWP), Portugal’s general insurance industry is set to grow at a compound annual growth rate (CAGR) of 5.9% from €5.7 billion ($6.8 billion) in 2021 to €7.6 billion ($9.3 billion) in 2026, forecasts GlobalData, a leading data and analytics company.

According to GlobalData’s Insurance Database, Portugal’s insurance industry is projected to grow by 7.9% in 2022 and 4.6% in 2023. This is driven by a strong uptake of personal accident and health insurance (PA&H), which, compared to other types of insurance, is expected to register the highest growth of 12.2% in 2022.

Sutirtha Dutta, Insurance Analyst at GlobalData, comments: “The growth in Portugal’s general insurance segment will be driven by an increased demand for private health insurance and a rise in occupational accidents. Additionally, health insurance premiums are expected to grow by more than 10% in 2023 due to inflationary pressure leading to higher claim amounts.”

PA&H insurance is Portugal’s largest general insurance line, accounting for a 37% share of GWP in 2022. The PA&H insurance segment is forecasted to register a CAGR of 6.7% between 2021-2026, supported by the country’s aging population. Further, insufficient coverage and longer waiting periods under public health insurance will also support demand for private health insurance.

The Portuguese government also introduced a new law in January 2022, which enables people who overcame serious illnesses to receive insurance coverage without any discrimination or increase in premiums. This will also support growth in health insurance coverage.

Motor insurance is the second-largest segment, accounting for 26.2% of premiums in 2022. This segment registered a slower growth of 2.2% in 2021 due to a global shortage of semiconductor chips and a slower recovery in automobile sales. This is expected to continue in 2022 with motor insurance forecast to grow at a CAGR of 3.6% between 2021-2026.

Liability insurance is Portugal’s third largest general insurance line, accounting for a 17.8% share in terms of GWP in 2022. The segment is driven by workmen’s compensation insurance, which accounted for over 85% of liability insurance premiums in 2022. In Portugal, Workmen’s Compensation or occupational work accident insurance is mandatory owing to a large number of work accidents.

Property, financial lines, and marine, aviation, and transit insurance account for the remaining 19% share in 2022.

Sutirtha concludes: “Supported by mandatory insurance lines and demand for voluntary private health insurance, Portugal’s general insurance industry will maintain strong growth over the next couple of years. However, inflation, which is currently at an all-time high, will impact profitability.”