Eyeing a US expansion, Adi Kaimowitz’s Virtual Actuary takes off

JOHANNESBURG — In a previous podcast with BizNews in 2018, Cape Town-based Adi Kaimowitz told us all about his interesting startup ‘Virtual Actuary’, which has been dubbed the ‘Uber of Actuaries’. Almost a year later and Kaimowitz’s model has been hailed globally amid him being invited recently to speak at a discussion on actuaries hosted by the Hartford InsurTech Hub in the US. Kaimowitz is now also planning a US expansion for Virtual Actuary amid interested demand from that side of the globe. We catch up with Kaimowitz to find out more. – Gareth van Zyl

It’s a warm welcome again to Adi Kaimowitz, who heads up what can be dubbed the Uber for Actuarial Services, a company called Virtual Actuary. Adi, thanks for chatting with us again.

Hi, Gareth, thanks for having me on again.

So, a lot has happened since we last spoke, last year, your business expanded. Can you tell me more about the latest update?

Thanks so, what’s quite nice is that we were hoping it was going to go quite well and now in hindsight, it has gone quite well, which gives us more confidence that what we are hoping to achieve is definitely achievable. I think we’ve picked up about 35 clients, really solid clients, in the last year, which we’re very proud of. They’re ongoing clients. Our revenue has reached the teens, in the millions, which is quite nice for our first year (in Rands), and the ship is sailing. The actuaries are happy. The clients are very happy. We have penetrated the market and we are now known and relatively established and I’d like to believe that the first year was really just a starting point, just to gain that traction. I think now that we’re on the field we can really focus more on strategy and on proper growth, instead of just getting onto the field.

Just to give people an idea – you basically bootstrapped this business. You started it out of Cape Town?

Unfortunately, it was the ‘we’re going for it anyway no matter what’ approach. The key was that we believed we had the actuaries, who are really the foundation of the business that could do the work. We had clients that we believed needed work to be done. We have approached those clients in a meticulous and a gruelling process. They’ve responded in a very positive way. We’ve taken on that work and we had to bootstrap, but we got over the hill and now we’re positive. We weren’t desperate or forced to get an investor so, yes, we’re now at that point where should we want to go into an investment round, which is what we actually want to do, it’s because we want it and not because we’re desperate for it.

For those who haven’t heard of you before, in terms of Virtual Actuary. In a nutshell, what is the focus of the business? What difference does it make to companies’ lives?

We’re an actuary consulting business. Our actuaries work within life insurance, general insurance, health care, investments and banking. We assist our clients who are generally actuaries with the capacity to do the work. So, that’s the very quick bird’s eye view. Fortunately, the skillset is transferrable across regions, besides a little bit of regulatory oversight. That’s our core business. I also believe that being a business of actuaries we also have the ability to branch out into other areas, not just pure consulting. As a result, we’ve now moved into the Software as a Service (SaaS) market for actuarial modelling software with one of our partners in the US so, we are now going into the software business of servicing clients that use software, so this is the InsureTech market.

The same could be said on the FinTech side – so modelling software in a banking environment as well as an investment environment, which is a whole different story, and some might say that we are an InsureTech and Fintech factory because anybody looking to create a FinTech or an InsureTech gets to a point where they need actuaries involved. So, that’s where we get involved to build those InsureTech and FinTech products, either for ourselves or for other clients and yes, I guess there are one or two other things that are happening as well that allow us as consulting actuaries to move into different revenue streams that are not purely actuarial consulting. But there’s a lot going on.

It’s a business that has a lot of different departments and we’ll see where it goes to but that, in a nutshell, is kind of what we do and how we hope to generate revenue, hopefully in Rands and then as we grow into different regions, in different currencies and for different markets.

So, as you say, you’re focusing on growing into other regions. Can you give us an idea of who some of your clients are in other parts of the world?

So, we haven’t really taken on too many clients in other regions. This is because we are working on our cloud-based ability so we’ve really held back on pushing too hard. We have had some requests from the Cayman Islands, some insurance companies, and from the UK some new start-up insurance type companies, and in Hong Kong from consultancies that service a whole range of clients. We haven’t actually pushed too hard to take on clients and those that we have, we’ve tried to rather just allow the actuaries in those regions to service them as a mini JV.

So, the jurisdiction and the ability to take on clients is a very tricky one when they want to contract with a SA business. After a lot of research, we realised that in order to actually operate in our country we have to have an entity in that country. It’s quite a realisation for someone who hasn’t done it before and so, we went to the US about 3 or 4 weeks ago. We did open up a business on that side, Virtual Actuary LLC, it has its own bank account, which allows us to contract with the US clients. This will be our first major push, which is in our year-two, into that US region.

I met with some actuaries on that side and we’re just waiting on final ironing out of some ideas for them to oversee and lead the US team. So, very competent dynamic actuaries and we’ll build a team around them in the US. We also have some partnerships happening in the UK for some companies that want to do some JVs with is into that region so, how we penetrate and how we go in is not simple, unfortunately, but it’s quite a focus for us in this year. We don’t have the most amount of clients at all really, on that side, but our goal over the next two years is to generate 90% of our income from the US and overseas markets.

Now, it’s a matter of building the blocks to be able to service those clients and do it properly. We don’t want to do it in an immature, a million miles away type of way. We’d rather set up a base there. Albeit it’s a virtual base, sure, but at least the channels are correct. So, that the client will know that we have people there that are competent and ‘in-country’ with a current regulatory experience that gives them the confidence to work with us. Otherwise, it’s kind of fragmented and it doesn’t really work properly so, that’s the focus for now.

You, in fact, were also recently invited to the US to speak about actuarial science. Can you tell us more about that?

Sure, I can’t take too much credit for that. I think that the credit really lies in our approach on LinkedIn. Our focus has been to make ourselves available market through LinkedIn. It’s a social network if you think it’s a social network, unfortunately, you need to get a slap in the face because it’s not and you’re going to get left behind. We’ve reached out to industry leaders, who run the companies that utilise actuaries and we’ve mentioned to them that we have the skillset across the various sectors, life insurance, general insurance, banking and investments to service them.

Kaimowitz talking in the US.

They have, in turn, responded positively. That outreach, which is ongoing, there’s a lot of discussions with a lot of different people and so on and this is why we’re going into those different regions on LinkedIn and there’s a couple of different channels. Some are venture capitalists, investment type people for our expansion plans. Some are pure clients as well that we want to service. Some are accelerator type colleagues that we hope to make friends with and one of those reached out to me and said that they have an actuarial insure tech conference in Hartford, Connecticut, could we come and speak about the unfortunate hot-topic of disruption and the relating to the actuarial world.

Our model itself, as you know, lends itself to being into that category, which is just by default, I guess. We have no office space, which means we can charge less than half than some of the others that are tendering for the same work, that’s locally and globally. Our actuaries also make most of the money – we just take a smaller portion. At the heart of our business is that our actuaries are more important than the business, and if we all move forward as an organised collaborative – we can benefit together. So, that model was recognised by a Hartford InsureTech Accelerator and they asked us to speak. In fact, one of the SA companies is actually on, one of the insure techs is now in that accelerator right now, actually, as we speak.

They asked us to speak. They also paid for the flight so, while we were there, I also needed to finalise the paperwork with our InsureTech partner, Insure Tech Global, who we have helped develop an actuarial modelling software for and while I was there, we opened up the business and so on. So, it was one of the greatest achievements of my life to go there and represent our actuaries, who are building the business and we succeeded as a team. It was a team effort to go there. I was really just the spokesperson but I think the quality of the effort comes down to the actuaries in our business.

That’s what happened and I went across and LinkedIn is the winner here and we can talk about it in more detail. LinkedIn and WhatsApp are one of the reasons why we’ve expanded so nicely but LinkedIn is really our ability to reach out to the decision makers, your chief risk officers are banks that need models built, and your chief actuaries and your unit heads and your country heads and really just to say to them, we’d like to service you, and that’s how it happened. It was very successful.

It’s very interesting. Are top business executives quite responsive on LinkedIn?

Yes, but you have to do it in a respectable way. The key is to reach out. Firstly, you have to have a decent profile. The profile has to have a quality photo that is professional and welcoming. Then secondly, there’s a process of describing who you are and what your company does, and what you do in your company – it has to look legit. If that is the case and you then ask to connect with somebody, and they feel that they can get a benefit from you. Fortunately, they can see your profile. They will then accept that request to connect. What you don’t want to do is to be a nag and immediately send them something and look like an absolute sales call.

It is a relationship that you’re building and that takes nurturing but I think once they’ve seen a bit of your activity, your interactions, your comments and so on, on other peoples’ posts and they feel that this person comes across in a certain way. Then you send them a nice message, very quick, very short, ‘Hi, Tina. I see that you’re running this particular business. Would it be okay if we just had a quick chat about X, Y, and Z? Please let me know if this is suitable.’ Quick and easy. If they don’t respond that’s okay but the fact that they are within reach, in their pockets. In their pocket, no secretaries, no ‘I’ll be available in three weeks because I’m travelling.’ ‘I need to have my exco sitting at the meeting.’

In their pockets, at home, sitting on the couch so, if you can just reach out in a respectable way then they will be happy. You don’t want to do the whole thing in writing with an email because that’s the lazy approach. ‘Can I have a number I can reach you on, please? I can phone you whenever you’re available. It will take more than 5 or 10 minutes can we just have a quick chat?’ If they say, ‘yes’ great, and most often they will. But then you obviously have to pull-off the chat and there’s a process of okay, they know who you are now. They know what you can do. You’ve now set them a deck of your business, and some services that you can do.’

Maybe follow-on when they feel maybe that service will be needed. What is your pricing? What is the reason why your business is something that they should use, as compared to someone else? If you can just get those points across, I think you’ve achieved a hell of a lot without really spending any money and building a global network of clients. In my opinion, they’re grateful that you got hold of them because the truth is your services are needed but they’re just using someone else so, I have no doubt that if you can tell them that your prices are more affordable and your quality is just as good, if not better. Well, I think the likelihood of them wanting to use you is quite high.

What does the year 2019 have in store for you and beyond that? What is your focus now?

Thanks so, I just want to also mention, as I always try to do is that this is a business that we’re growing for the actuaries. It is founded on the ethos of making it happen and us, actually actioning our desires so, we’re doing that. This all sits on the credibility and the years of hard work of the Actuarial Society of SA that has done such a good job of making the actuaries in SA look credible and in a good light, with the rest of the world.

So, on the back of that, which makes our job much easier, we are now going to be building, firstly carrying on the work in SA and making sure that the clients are happy and that our actuaries are feeling like we are building this business for them, which we are. A lot of them are very involved in building the business and it’s an amazing thing to see people following their dreams.

Further, we are looking to build a team of about six leading actuaries in the US, who will oversee one, or two, or three different departments. Maybe we’ll grow that number but we don’t need to for now. Then really, just to reach out to one, or two, or three, or four, or five clients in the US and to take them on board with them, and to do exactly what we did in SA, by servicing them. Our aim would be to funnel the work from there, through the US actuaries, into our SA actuaries and to make sure that that is successful and that the clients are happy. That the deliverables are being met and we get a bit of a flow going.

We will then carry on taking on more clients and we will then, depending on how much work is available, scale up either quickly, well no, we’ll probably won’t do it too quickly – it’s unnecessary. So, our aim is, if we could take on 10 US clients in the next year that will be awesome, and coupled with that, we’ve got some expansion plans. We’ve some JVs or really, some expansion plans in some other territories so, it could flip in two-seconds and we could get something going on in Asia or the Middle East, which just forces us to put quite a bit of effort into that as well. So, that could happen. It most probably will but really, if we just build the US team for 2019 – that will be fantastic.

Adi, are you’re going to stay in Cape Town?

That’s actually a good question. So, the truth is, is that there’s really good wind in CT and I’m a kite-surfer so, the reality is that I don’t want to lose that. To be able to kite-surf in the morning or in the afternoon is really amazing so, I would hate to lose that. But the reality is, is that I will most probably have to spend some time between CT, the US, possibly one or two other territories so, I do also have some conferences in Johannesburg that I’m engaged with, in March, April, and May so, we’ll see how the second half of the year plays itself out. I’ll most probably be between a few different places – it’s unavoidable.

Adi Kaimowitz, thanks so much for taking the time to chat to us again.

Thank you, cheers.