This report does not constitute a rating action. The sector reported record high profitability in 2023 with a return on equity (ROE) of 25% and a return on assets (ROA) of about 1%. We estimate that 2024 was also very strong, and project ROE of 20% and ROA of 0.80% for the full year. For 2025-2027, we estimate that the Portugal life market?s technical profitability will remain solid, although we forecast a gradual weakening due to declining interest rates. We therefore expect ROA to be about 0.70% in 2025-2027 and ROE to decrease to about 16%-18%. In 2024, traditional life insurance products accounted for 72% of gross premiums written (GPW), while unit-linked products accounted for the remaining 28%. Traditional products
