Taking the ‘eina’ out of insurance

A growing disdain for the “old-boy” structure of the domestic insurance industry prompted insurance veteran and entrepreneur Gideon Galloway to ditch the corporate rat race in June 2012 and establish disruptive insurer King Price.
 
Starting with 23 employees, King Price hit the market with a novel vehicle insurance product that saw premiums decreasing every year – a world first, says Galloway. Today, over 102 000 clients have bought into the idea. 

The now 700 employee-strong company’s portfolio has since included cover for buildings, home contents and businesses, among others – and even an option to insure Apple watches and golf clubs for R1 per month.

What sparked the idea of starting an insurance company?

I spotted an opportunity to change the insurance industry, because, in my opinion, it’s dominated by giants that don’t realise their clients are becoming more discerning.

For example, cars depreciate every month, so why aren’t all insurers decreasing car insurance premiums monthly?

I became frustrated with the lack of innovation in the industry and the stuck-up manner in which traditional insurers didn’t even want to communicate with their clients. It seemed like there was an opportunity to do better in the industry; an opportunity to take the ‘eina’ out of insurance.

The business model looked massively scalable, especially if done correctly, so we took the chance.

How did you get start-up funding?

I used the investment income I received from the various companies I had built over the years, and a small group of friends and family members (luckily) believed in my vision and supported me with R50m. This got us through the first three years of building the system and finding investors with bigger pockets to get us to the launch date.

What are the biggest difficulties you’ve had to overcome?

The industry is incredibly cut-throat with heavy competition from bigger companies.

We realised early on that we needed to carve a niche market approach for ourselves based on what consumers really want, which is more cash in their pockets. Our first step was premiums that decrease every month.

The other challenge associated with being the new kid on the block is budget. We don’t have a lot of cash to spend on fancy commercials but we do have an amazing, crazy, passionate company culture and a game-changing approach to insurance.

We make every cent count when it comes to cutting through the clutter and communicating with the public. “Lean and mean” is one of our seven family values. We apply the principle to every aspect of our business.

What was unexpected?

So many things… watching our brand evolve, grow and find its way into hearts, homes, businesses and communities throughout South Africa and Namibia. Every day, witnessing the teamwork that powers the company. And lately, how much we’ve come to rely on data.

Analytics shapes the business and enables it to craft products for specific audiences and risks. Our cover is light years away from the one-size-fits-all product that many insurers still offer.

Biggest lesson learnt?

No risk means no reward. I had to invest every cent and I lost a lot in the process. But that’s how you learn.

How tough is competition in your sector, and what differentiates your service from others?

Competition is very tough. But we’ve made it through because of our world-first pricing strategy, real-time information technology systems and data analytics, and our unique culture-based business model.

Our advertising, our products, and how we treat our clients, are also completely different from our competitors.

What is the best business advice you’ve ever received?

Nothing turns out quite like the original plan and spreadsheet, but don’t sweat it! Life happens, so be flexible and adapt.

With the right team, things can always be fixed. Problems give rise not only to solutions, but also to improvements and new opportunities. Embrace these hurdles, learn from them… But don’t make the same mistake twice.

What non-work habits help you with your work/life balance?

I’m a keen adventurer! I’ve summited Mount Kilimanjaro and I enjoy adventure sports, like paragliding. I love running and have finished a few marathons and cycling events, as well as Ironman. Travelling with my family is the best – it’s when I truly relax.

What is your three-year goal for King Price?

Last year we expanded into Namibia, and we also launched business insurance. We have a few new product lines launching in the coming months. And we’ll be looking at other continents very soon!

We’ll also maintain a focus on analytics – we harness data and technology every day to further refine our ratings engine and deliver insurance that’s fair and logical: the way we think it should be done.

This article originally appeared in the 27 July edition of finweek. Buy and download the magazine here.