Leading From The Front - Marthinus Visser, Outsurance Group CEO

Expanding Internationally

By Fiona Wakelin

OUTsurance was started in 1998 by three entrepreneurs, Willem Roos, Howard Aron and Rene Otto inside the Rand Merchant Bank Holdings stable. It brought a number of innovations to the somewhat stale short term insurance market at the time. These included the OUTbonus, flat excess structures, roadside assistance and covering vehicles for retail value. These addressed many of the common gripes around insurance at the time. It made use of home-grown talent and built all its systems and underwriting capabilities in house. It was able to reach break even after a mere 22 months and continued a strong organic growth trajectory since then as the brand got stronger and more established. Positive word-of-mouth played a key part in the successful building of the brand.

In South Africa the company offers car, home, business and life insurance; in Australia they offer car, home, business and bodily injury insurance; and in Ireland the offering includes car and home insurance.

OUTsurance Group CEO, Marthinus Visser shares key insights into driving outstanding growth:

Creating A Runway For Growth

We have identified the three key needs of insurance consumers as a competitive price, good service, and trust that your claim will be paid. By focusing our efforts every day to get better at delivering those three elements, we are becoming more and more competitive allowing for strong organic growth. Through our successful international expansion, we have also created additional runway for growth, over and above the South African market. For example, our Australian business, Youi, now accounts for 63% of our Group revenue and it still has significant runway for growth given that the Australian car and home insurance market is more than five times the size of the South African market. Our recent entry into Ireland is creating further runway for organic growth.

Significant Trends In The Industry

We have observed large scale technological changes enabling omni-channel servicing of clients. These channels now being digital, call center and face-to-face allowing for the level of human intervention to vary according to customer needs. We have also observed a large increase in regulatory complexity increasing the cost of compliance. Furthermore, we observed increased natural peril events putting upward pressure on reinsurance cost and premiums. Lastly, we observed an increase in competition over the last 25 years.

Subsidiaries

We launched in Australia in 2008 and that business has overtaken our South African business in size. Contrary to many South African businesses that struggle overseas, we have been able to build up a successful business that is now contributing materially to the overall group. It has many things in common with our South African business and we collaborate closely in many areas. We launched in Ireland earlier this year and hope to emulate the success of the Australian business. Importantly it is also a greenfield start-up like our South African and Australian businesses as this allows you to lay the right foundations in terms of people, culture, systems and processes. The only downside is that you have to be patient as it takes a long time to build such a business, but the reward is there if you are successful.

Impact Of Technology

Technology has made it easier to offer the omni-channel service. It has also enabled more accurate risk pricing as well as improved productivity in many areas. All this supports better delivery of price, service and trust. Mobile phones and large data processing capabilities really enabled step changes in some areas.

Have Climate Change and The Commensurate Extreme Weather Events Affected Your Business Model?

Yes, it has had a large impact on the claims cost related to these events causing especially home insurance premiums to escalate faster than CPI inflation. It also required bolstering of resources and digital capabilities to cope with the influx of claims that these events can cause. It also caused reinsurance costs to increase materially. Understanding flood risk and underwriting for it has become critical. It is such a topical issue and insurance alone can’t solve it. We need collaboration between governments, banks and insurers to tackle this issue to make sure that infrastructure is built and maintained to minimise the impact of these events but also that new developments do not take place in high-risk areas.

How Would You Describe Your Role In OUTsurance?

My primary role is to set the strategy and oversee its successful implementation. As part of this I need to get buy-in from the management teams and boards that it is the best strategy to follow. A key part of my role is also to assemble the best possible team of senior leaders to execute the strategy. Investor relations is also a key part of my role as you have to be accessible and accountable to investors to make sure they are comfortable with the strategy.

What Do You Enjoy Most About What You Do?

I really enjoy incremental improvement and how it brings success. The good thing about shortterm insurance is that the feedback loop is quite short and as you implement plans to support the strategy and improve outcomes you can quickly see whether you are successful or not.

What Have Been Your Most Memorable Challenges and Milestones?

The early days in a start-up always present many challenges and the rate of making improvements is incredibly high. The two successful start-ups of OUTsurance in South Africa and Youi in Australia are true milestones. A key challenge is to preserve that start-up culture even as you get much larger to continue to solve problems quickly and in a pragmatic way. If you do that, the business continues to thrive.

Please Share With Our Readers What You Are Looking Forward To In The Coming Year

We are looking forward to ongoing incremental improvements in our offering of price, service and trust. This should continue to support the organic growth in South Africa and Australia. Our OUTsurance face-to-face agents in South Africa is also a very exciting channel allowing customers with more complex needs, like commercial clients and high-net-worth individuals to receive a bespoke face-to-face service from a dedicated OUTsurance agent. Gaining traction in the Ireland market following the successful launch will be critical.

Do You Have A Message of Inspiration For Aspirant Entrepreneurs?

Yes, if you have a product for which there is a clear need, you have a simple strategy to offer it, you surround yourself with the best possible people to help you execute it, and you have patience and perseverance, you can achieve extraordinary things. The OUTsurance Group has grown from a start-up to a company valued at more than R90 billion, employing more than 7 500 people directly, and many more like our service providers and pointsmen indirectly – all this in just 26 years. In the process it has enabled many people to buy their first cars, first homes and sent their first family members to university. It is also paying billions in tax allowing for the support of many people. As such, successful entrepreneurs can really change the world for the better.