King Price Insurance’s CEO Gideon Galloway, who built an insurance company in South Africa worth over $226 million in six years, talks investments, industry trends and how self-driving cars will change the entire car insurance landscape.
Why insurance?
I have a passion for insurance, especially as the business model is massively scalable if done correctly. Also, the industry was ripe for change. In my opinion, it’s dominated by fat cats who don’t realize clients have become more discerning. Car values depreciate every month, so why don’t all insurers decrease car insurance premiums monthly? All insurers pay out the insured value if something happens to a car (under comprehensive insurance), so why charge more? I decided to take the greed out of the equation and rather offer insurance that makes sense.
How does your business model work?
The insurance industry is incredibly cut-throat and there’s heavy competition from bigger companies. We realized early on we needed to carve a niche market approach for ourselves based on what consumers really want, which is more cash in their pockets. So, we hit the market with our decreasing premium model. Our competitors didn’t expect us to last longer than three months. More than six years later, we are not just surviving, but thriving.
What are the emerging trends in the insurance industry?
We’re keeping our eye on a number of trends…Wearable tech, advances in mobile tech, self-service and on-demand insurance, ever-smarter fraud tools, telematics, cyber security… Looking further into the future, the number of individuals who own cars will decline sharply. And, self-driving cars will change the entire car insurance landscape.
What’s the craziest insurance scam/claim you have come across?
The craziest one, by far, has to be the Evel Knievel [an American stunt performer] scam, as we call it. A Jaguar owner was struggling to sell his car, so he hired a rogue stuntman to write it off for him. He just gave him the keys, popped a helmet on his head, and told him to roll it. Which was a great plan until the point where the stuntman lost control, crashed into a concrete fence, was impaled through the chest, and died on the scene…
What is your investment philosophy?
I back the jockey, not the horse. When a potential business investment comes my way, I look at who’s going to run it. Is the leadership sound? And team? Is it a culture-driven venture? What are the values that underpin the organization? If the values don’t align with ours, it’s an immediate no-go.
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What is your most prized investment?
King Price. To make my vision a reality, I used all my investments and the income from all the companies I’d built over the years. I invested every cent and lost a lot in the process. All my savings were gone and I had two kids and a wife to take care of but I never heard God telling me to stop, and so I didn’t.
Your most regrettable financial decision and lessons learned?
The decision: not doing proper background checks on potential partners. The lesson: It’s quick and easy to give money away but it’s infinitely more difficult to get it back, even when the long arm of the law gets involved.
Your biggest investment blunder?
That one time I invested in a gaming app that got 14 downloads…
What is the most valued item in your home?
What I treasure most in the world – my family.
What personal assets/valuables have you insured?
All of the big important assets, but it’s also not wise to over-insure. Many people spend too much on life insurance, as an example.
The most expensive item you lost that you wish was insured?
My six-pack.
Sum up the principles that you live by?
Two words – give back. This is a life lesson I learned long before King Price.