Tranquilidade becomes first choice for Portuguese insurance

Non-life insurance distribution in Portugal relies heavily on agents and brokers. Being the first choice for more than 1,800 brokers, multi-brand agents and partners is essential, and is the key to Tranquilidade’s success


Portugal is located in the southwest corner of Europe, and in the 15th and 16th centuries it expanded a Western influence, establishing the first global empire. The country reigned as one of the world’s first major economic centres, with a strong political and military presence.

Known for its rich history, the country has also demonstrated a strong ability and will to overcome challenges and hurdles. This has been the case for several centuries now, and looks set to continue. Since 2008, the Portuguese economy has experienced immense challenges, with the emergence of the financial crisis hitting the international markets, creating internal turmoil. In 2013, the economy continued to be significantly conditioned by the external de-leveraging and fiscal consolidation process required by the Troika agreement. GDP fell by 1.4 percent during 2013. Investment and private consumption fell once again, and unemployment remained high.

Exports continued to perform well, but were insufficient to compensate for the downturn in domestic demand. Although the three last quarters showed a positive performance in terms of GDP, the remainder of 2014 and the coming years will continue to be very challenging.

It is critical to be the first go-to provider of the agents when a client wants an insurance

Falling figures
In 2013, the Portuguese market of non-life insurance amounted to $4.92m, and has been falling since 2011. In 2013, with the exception of health, all major product lines decreased. The mandatory insurances, workmen’s compensation and motor product lines were the most affected. Workmen’s compensation decreased eight percent (down 31 percent) due to an increase in the unemployed and the increasing competition between insurers. Motor insurance fell 5.8 percent (down 18 percent compared to 2008) due to the economic environment and, again, due to an aggressive price-based competition between insurers. Consequently, the market’s non-life insurance combined ratio (104 percent) continued to be problematic.

The Portuguese insurance market needs to invert the existing strong pressure on price, in order to recover adequate levels of solvency, since this sector has been operating with a combined ratio exceeding 100 percent for many years. A sustainable development of the sector requires a proper adjustment of prices to risk, but also focus on factors such as product innovation, service excellence, operational efficiency, or commercial effectiveness.

Tranquilidade was founded in 1871 and is the second largest non-life Portuguese insurer. It is an ‘agent company’ with a wide and diversified national distribution network of more than 1,800 professional points of sale. The network of Tranquilidade has 80 brokers, 1,400 multi-brand agents and 400 tied partners, covering the entire national territory.

Tranquilidade provides the full range of non-life products with customised solutions for all customer segments: individuals and families, SMEs and large corporations. Through its life insurer, T-Vida, it also offers life, retirement and financial products. Even in the difficult environment in Portugal, Tranquilidade gained 0.8 percentage point market shares to 8.4 percent, while improving its claims ratio over the last five years. The fact that Tranquilidade has a clear vision and strategy drives very consistent initiatives, and allows the organisation to face the future with confidence.

The company grows organically and selectively, continuing to rebalance profitability and focus on service quality and efficiency, ensuring that the entire organisation is fully aligned and motivated around the vision of being the best choice for customers and distribution partners. The distribution of non-life insurance in Portugal relies heavily on the agents and brokers channels, which represent about 73 percent of sales. This is essentially a multi-brand market, since tied agents represent just over 10 percent.

The Tranquilidade network


professional points of sale




multi-brand agents


tied partners

Face-to-face business
For customer facing services, the insurance agent is the main port of call. This person assumes the role of insurance consultant, ensuring a personalised relationship and after sales service. They are critical players in this sector, even more than in other retail industries, since they tend to direct the relationship with the clients. For them, the insurance companies are product suppliers. This is especially the case for multi-brand agents, as they’re the ones that drive the clients’ choice of insurance company.

The multi-brand agents decide which suppliers to propose to their clients based on criteria as diverse as the price, the quality of the product and the service offered to their clients and to themselves, the level of commissions and incentives, the reputation of the insurer, among others. Given the importance of this channel, the investment of insurance companies in the growth and consolidation of partnerships within its network is essential.

The value proposition offered to them must be distinctive and dynamic, which is the key to obtaining success. Whether Tranquilidade is the first-choice provider of an agent or not makes all the difference in business development. It is critical to be the first go-to provider of the agents when a client wants an insurance.

In its aspiration to be the ‘best choice’ of professional agents, Tranquilidade is focused on four operational priorities. To offer competitive products with price discipline, innovation and diversification in business, guarantee exceptional quality of service, and reinforce proximity to its distribution network. It does not compete only based on price, as many of its competitors do. In a very competitive market such as insurance, this is only possible in cooperation with the distribution partners, ensuring that all other operational levers are at their best.

There is a culture of innovation in products and services at Tranquilidade. It faces innovation as a way to avoid the price trap. The company continuously and systematically seeks new business opportunities and improvements to the current product portfolio, and also invests significantly in tools to simplify the agents’ sale process, its customer retention and cross sell.

The quality of service offered to clients and agents is embraced in an almost manic way. In fact, regular surveys of customer satisfaction are conducted at different touch points to ensure that all operations are performing as best practices. The results show high levels of satisfaction, with 85 percent of customers recommending the company. Another important indicator is the number of complaints submitted by clients, which is less than 0.25 percent of serviced clients, and has been falling for five years consecutively, in counter cycle with the global figures of the market.

The quality of service offered to clients and agents is embraced in an almost manic way

Finally, the proximity to the agents network has to be comprehensive. It begins with having a deep individual knowledge and understanding of all the distribution players in the market. This competitive advantage is difficult to replicate as it currently stands.

This proximity to distribution networks involves not only commercial teams on a daily basis, but also the central departments and even the board, who has regular brainstorming sessions with key agents. The focus is on their concerns and suggestions of improvements that are evaluated and fed back to operational plans for implementation.

This culture and commitment at Tranquilidade has allowed the company to become a reference in the market. According to several independent institutions, it is setting the standards, with recognition and acknowledgement of several consecutive distinctions.

Earlier this year the company again received the awards it had won in the previous two years: insurer with the best reputation in Portugal (and second in the Iberian Peninsula) by the Reputation Institute; ‘Consumer’s choice’ in the insurance category from the Consumers’ Choice Awards; ‘Seal of Excellence’ by Superbrands; and ‘Best Call Centre in the insurance industry’ by the Portuguese Association of Call Centres.