After just 20 months in business, King Price has over 40 000 clients and is selling approximately 5 000 new policies a month. The majority of its clients are between the ages of 25 and 35, with around 40% above 35. “People have a perception that we are attracting a cheap market. While we are attractive to the first-time vehicle market due to our affordable premiums, we also insure Ferraris, Bentleys and Rolls Royces,” notes CEO Gideon Galloway.
In its first financial year, the insurer paid 74% of its premium income towards claims – slightly higher than the industry average. It has paid over 7 000 claims since inception at a cost of R168 million.
Galloway describes as “feeble excuses” the reasons given by
other insurance companies for not decreasing insurance premiums as a client’s vehicle depreciates over time.
“I think it’s an easy excuse for CEOs and board members to blame exchange rates, interest rates, insurance cycles and bad weather, because these are all out of their control. We take all of those elements into account, but still decrease your premium monthly and can afford to do so. I’ve studied the numbers and average repair costs have barely increased with inflation, even when taking into account the increase in the cost of parts,” he maintains.
Galloway explains that vehicles insured by King Price depreciate, on average, just more than 13% a year. This means that, after applying an average annual inflation-linked increase of about 6%, clients’ insurance costs are guaranteed to come down. Premiums are also automatically adjusted monthly.