Earthquake insurance could soon be mandatory in Portugal

Portugal’s Prime Minister Luís Montenegro plans to create a mandatory insurance scheme for earthquake risks, promising some financial support for those who might find it difficult to afford the cost.

The announcement was made during the presentation of the Portugal Transformation, Recovery and Resilience (PTRR) programme, a €22.6Bn investment in the economy over the next nine years.

The measure will imply both changes in the insurance sector and a business opportunity.

In Portugal about half of homes have no insurance of any kind and less than 20% have earthquake cover, according to Rogerio Campos Henriques, CEO of insurer Fidelidade.

In an opinion piece published on April 24 on the PT50 website, Rogerio Campos Henriques wrote that “in the current climate context, with the increased severity and frequency of extreme events, this is no longer a merely theoretical discussion.

The aggregate economic impact will reach several billion euros over a few years. And when the country is caught unprepared, the problem is not just financial. It is social, territorial, and a matter of trust in institutions.”

Ana Teixeira, CEO of the insurance company Mudey, in an opinion piece in Jornal Económico published on April 1 reinforces the figures:

“It is estimated that only about half of the homes in Portugal have any type of insurance. And even within that, a significant portion only has minimum coverage, often not sufficient to meet the real risk. The example of earthquake risk is particularly revealing: only about 19% of homes are protected against earthquakes, according to data from the Portuguese Association of Insurers.”

Source: Jornal Economico; Credits: Fidelidade.