Portugal’s general insurance industry is projected to grow from €5.28bn (US$6.03bn) in 2020 to €6.68bn (US$8.35bn) in 2025 in terms of gross written premiums (GWP), according to GlobalData, a leading data and analytics company.
As per the latest data from GlobalData, the general insurance industry in Portugal is projected to grow at a compound annual growth rate (CAGR) of 4.8% over 2020-2025, primarily due to economic recovery following the COVID-19 pandemic.
Sutirtha Dutta, Insurance Analyst at GlobalData comments: “Portugal’s economy declined by 7.6% in 2020 due to lockdown restrictions, which resulted in a decline in commercial activity and contraction in private consumption. The decline in sectors such as automobiles, construction and travel impacted key lines of businesses in the general insurance industry, which grew by 2.4% in 2020, as compared to 7.2% growth witnessed in 2019.”
Personal Accident and Health Insurance was the largest segment in Portugal’s general insurance industry in 2020, accounting for 34.6% of GWP. The segment grew by 4.2% in 2020, backed by increased awareness due to the pandemic and growing demand for private health insurance. It is expected to grow at a CAGR of 6.2% during 2020-2025.
Motor insurance is the second largest segment, accounting for 29.3% of general insurance GWP in 2020. The segment grew by 2% in 2020 compared to 6.2% growth in 2019 due to a decline in new vehicle sales. However, the segment is expected to grow at a CAGR of 3.8% over 2020-2025 driven by the recovery in automobile sales and an expanding market for electric and hybrid cars.
Liability insurance accounted for 17% of general insurance GWP in 2020. The segment is driven by workmen’s compensation insurance, which accounted for 86% of the total liability insurance premiums in 2020. According to the Insurance and Pension Fund Supervisory Authority of Portugal, compulsory workmen’s compensation policy count increased by 2.5% in 2020 for the third consecutive year. Liability insurance is expected to grow at a CAGR of 4.5% during 2020-2025.
Dutta concludes: “While general insurance sales in the first half of 2021 were weakened by the resurgence of COVID-19, economic revival, led by a successful vaccine rollout and the recovery of health and tourism sectors, will help the industry to bounce back.”