One of the limitations of a salary, even a high one, is that your remuneration tends to be time-related. The number of hours a day you are able to work limits your opportunity to turbocharge income. Then, you have businesses that are also hard to scale up, like hotels – which have a maximum number of rooms for sale. For Gideon Galloway, insurance is an obvious route to wealth because it is scalable. You sell your product once and your customers keep paying, so it becomes money for jam. This is the model applied by life assurers, insurers and the intermediaries who ply their products. Galloway chats to BizNews founder Alec Hogg about his disruptive business, King Price. – Jackie Cameron
In this podcast, entrepreneur Gideon Galloway shares his thinking behind the R140m acquisition of Stangen and how a presentation by a BMW executive got him started towards creating the disruptive short-term insurer King Price.
Galloway worked for other insurance companies for about 10 years, realising that insurance is a scalable business type. “The insurance is definitely the one that’s the most dynamic and scalable,” he argues in a discussion with BizNews Radio presenter Alec Hogg.
In 2010, a 2005 BMW engineer from Germany presented a slide showing that it costs half the price to repair a new car versus an old car. What’s more, newer cars are safer than older cars, which means the ‘incident ratio’ keeps improving.
Cars depreciate and so should insurance premiums, but not as much as the car depreciation.
Turning to securing funding for a business dream, Galloway said it was “probably the hardest thing” to put his own money into it.
He also pitched his idea to more than 40 funders over four years. “In that period a lot of times you want to give up and then you keep on going. The biggest thing I learned was never to give up.”
Now, Galloway’s business is expanding internationally, starting in Namibia, and diversifying to insure commercial buildings, agricultural and marine assets.
