The earthquake felt this weekend and, the following Monday, in several regions from north to south of the country once again reminded us of an unavoidable reality: Portugal is exposed to significant natural risks, in particular seismic risk, with the potential to cause profound impacts on people’s lives, economic activity and social cohesion. Although Civil Protection’s operational response capacity is more robust today, an essential element of national preparedness remains missing: a structured mechanism that guarantees rapid and effective support for society and the economy when a major catastrophe occurs.
Experience shows that, after an extreme event, the time factor is decisive. For families that lose housing or income and for companies whose activity is abruptly interrupted, the speed of access to financial support and recovery mechanisms makes the difference between resuming a normal life or entering a prolonged cycle of vulnerability and instability. The absence of previously defined risk management instruments – particularly catastrophe – tends to delay responses, increase uncertainty and worsen economic and social impacts.
In this context, the creation of a National Disaster Fund must be understood as a tool for protecting society and stabilizing the real economy. A fund of this nature would ensure rapid support for affected populations, support the reconstruction of housing and essential infrastructure for communities and guarantee conditions so that companies — especially small and medium-sized ones — can resume their activity more quickly. By reducing prolonged disruptions, the fund would help preserve employment, income and productive capacity.
The economic impact of disasters goes far beyond immediate material damage. The disruption of value chains, loss of confidence and postponement of investment decisions can have lasting effects on economic growth. A dedicated financial mechanism, with clear activation rules, increases predictability and reduces uncertainty at a critical moment, functioning as a confidence factor for citizens and economic agents.
The effectiveness of a National Catastrophe Fund depends, to a large extent, on its coordination with the insurance sector. Far from replacing private insurance, the fund must complement it, covering extreme risk situations or protection gaps that the market, on its own, cannot fully absorb. The insurance sector has technical experience, risk management capacity and mutualization models that can contribute decisively to the design and governance of the fund, promoting a balanced sharing of risk between the State, companies and citizens.
Additionally, the involvement of the insurance sector can play a relevant role in promoting prevention and risk literacy. Encouraging more resilient behaviors, investment in mitigation measures and greater adherence to adequate coverage is essential to reduce future impacts and make the system more sustainable.
Creating an effective fund requires a collaborative approach, involving the State, the insurance sector, regulatory entities, experts and civil society. The transparent definition of support criteria, intervention priorities and monitoring mechanisms is essential to guarantee public legitimacy and effectiveness in the response.
Natural hazards cannot be avoided, but their impacts can be significantly reduced. Preparing the country to quickly support people and protect the continuity of economic activity is a strategic choice that reinforces social and economic resilience. Faced with risks that are known and recurring, the lack of preparation stops being a fatality and becomes a collective responsibility.
General Counsel na Zurich Portugal