Gideon Galloway, founder and CEO of King Price Insurance
Gideon Galloway is the founder and CEO of King Price Insurance, South Africa’s fast-growing ‘new kid on the block’, with sights set firmly for continental expansion.
Born in Benoni and schooled in Nelspruit, Gideon is oldest of two boys, and grew up ‘not too rich, not too poor’. He studied a BSc computer science for three years at the University of Pretoria but never completed the degree. “The independence caught me. In my first year, I started doing websites for clients and I registered my own business. I think from then on, I was just more interested in my own business.”
“I absolutely hate studying,” he says. At the time, e-commerce remained in its infancy, and wasn’t covered in the course at all – but it was this that intrigued Galloway the most.
After university, Galloway joined web development company Netactive as a graphic designer, and moved from there into programming. After the company closed, Galloway put his CV out far and wide in search of a new challenge – and found a job with Auto & General Insurance, starting in the IT department and building the company’s website. From there he became increasingly interested in marketing, digital marketing in particular, and moved on to become marketing manager at holding company Telesure Group.
In 2004, he left Telesure to start his own company – building a tech platform placing digital ads, before the days of Google ads. “It was the technology that made it good. The technology was bought out by local search engine Ananzi. We sold the business for R2 million, and that was the first bit of real money I made.”
After that he founded SAbest with a partner, an online marketing company that grew into a major company. He ran it for 10 years, in parallel with a number of other companies and jobs over that time.
“In 2006, my previous Telesure boss asked me to join them again as marketing director at their advertising agency. I accepted and declared my side-line businesses – at that stage I was running a web development company and an ad agency as well as SAbest.”
During his time as marketing director, he was centrally involved in the development of Dial Direct and First for Women, and was the instigator behind the group’s aggregator site, Hippo.
During these years, he had an opportunity to travel to markets including the UK and Australia and was intrigued by the dominant use of technology within the insurance market.
“I came back with the dream of starting an e-insurer. The resources weren’t there at the time, but the idea remained in the back of my mind. I was interested in the idea of: how do you start an insurance company with just 10 people?” The idea was for an insurance company from a lean startup model – using technology to drive innovation and efficiencies wherever possible.
“I researched India, China, Switzerland, learning everything I could about the ways technology was being used.” It was during this time he developed the concept of the now-signature King Price model of decreasing premiums.
But investors weren’t yet convinced. “In those years it was purely a thumb suck. My theory was, risk rate lives every month, with a faster arc for the risk, so the arc can depreciate the value and give you the right price immediately. The only upside is that you hope to keep the client longer. We know now that the model works, but in those years, we weren’t convinced. Even for me, it was just a gut feel. There was no data – nobody had done it before. It’s the world’s first. We all had to have faith that if you treat a client fairly, they will stay loyal. I’ve always believed in that.” Initally, investors were a little short on faith.
Galloway resigned in 2008 to start working on his dream. “I thought it would take 10 months to get investment. I was pitching for R300 million. Comparative insurers launched in those years had cost between R500 million to R1 billion. But after a year of pitching, I realised that this wasn’t going to work. So I funded it with my own money. I spent about R30 million to write my own IT system, get the IP, create the brand, get the domain and all that. My wife was a bit horrified – we didn’t even own a house at that stage, and I spent R1 million to get the domain.”
“We approached reinsurers, and Munich Re came on board. Once they were behind us, it definitely got easier. So after four years and 43 pitches – all requiring days of preparation and commutes around the country – we got the investment we needed, then the business started to catapult and we launched.”
At one point over that time, Galloway was running 14 different businesses – foraying into trucking, HR, an ad agency in Australia and a merchant company in Mauritius. “I came to the realisation that focus is important. I closed them all, except for Think Tank, my ad agency, and King Price.”
The King Price culture
The King Price culture is infectious and abundantly evident in every interaction one has with the company. Asked how seamless energy is achieved, Galloway starts simply: “We work hard at it.”
“I think most of it started back when I was at Hippo. I thought I’d knock the office down and see what happened. I watched that movie Fish – it’s in a fish market and they start throwing the fish around. I thought to myself: Flip, that looks like so much fun! People were irritated at the beginning, but it worked much better. People on the floor became far more efficient and engaged.”
“It breaks the corporate hierarchy. I started to dress in shorts. When our investors and Munich Re finally agreed to come on board, one of my conditions was that I was going to run it like an ad agency. The place is going to look crazy, people are going to have fun, and it’s not going to be a corporate brand. By then the brand and logo and feel had already been developed, anyway. For me, everything must be fun – the building, the people, the music. If you’re going to spend your life and energy in something, it must at least be fun.”
The benefits shine through in the work. “People become creative: your mind seems to work better, you are more relaxed, you come up with new ideas. People play at work, there is music, you have fun, you have fewer meetings, you talk to people rather than emailing them. You use your common sense – we empower our team not to simply follow rules, but to use their sense to do whatever they can to help a client.”
A key value for the company is finding employees that fit these values and culture and who come with humility. New recruits are offered a quitting bonus. If by the end of the first week a new recruit is not enjoying it, they’ll be paid their first month’s salary plus a quitting bonus of R20 000. But no one’s taken the offer yet. “We are thinking of upping it,” he chuckles.
Galloway reflects that the culture has become a part of the organisation not reliant on himself. “It’s in the management team’s DNA now. We want to be the number one company, and we really do put a lot of work and emphasis on this culture. We continually revisit our values and where we are going. We have an open door policy, and we share that with the whole company. There are no secrets, and that helps a lot with efficiency and productivity.”
Another value is creative freedom, explains Galloway. Employees are free to work from home if and when they want to, and they are encouraged to make their own call on decisions without continuous fear of making mistakes.
Galloway notes that these elements might be difficult to maintain as the company grows, but he believes it is possible. “I don’t know if it is going to be the same when we’re in 10 countries and are 3 000 strong, but we’ll try our best. A culture is bigger than any individual, and it creates a synergy. At a certain point, the culture takes over and sort of drives everybody.”
The future is growth
Officially launched in 2012, the company will hit 100 000 clients on the book by the end of 2015. For the last financial year, it achieved a loss ratio of 69 per cent and was reaching profitability. “I don’t know of any other African big insurer that has achieved that in such a short time,” he comments, adding that with the foundation built, King Price is ready for the future – which is all about growth.
“We will have our commercial licence before the end of the year, to be launched in early 2016. We think it could be as big as King Price is currently. We will launch in Namibia around July next year, and in Botswana and Zambia in 2017.”
King Price will expand into life insurance, and will decide on its next continent for expansion within the next two years. “This was all in the plan from the start, and we’re just rolling it out according to that plan,” he notes.
One might be forgiven for imagining that with all this going on, Galloway might be short on a personal life. But not at all. Married for 11 years, Galloway is father to twins and a younger daughter. “My wife and I didn’t sleep for about two years,” he says, “but we’re a happy family of three kids. We love camping, and having fun.” As we chatted, Galloway was hours away from a trip to the UK with his wife to enjoy the Rugby World Cup, while granddad had some quality time with the kids.
Passionate about building teams and businesses, Galloway still owns his ad agency. “I love it – it’s so creative, and every challenge is new each day. Moreover, I have a passion for financial service, particularly insurance. There are few businesses so complex and interconnected and with the ability to scale so big. That’s what I love.”