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Outsurance: Willem Roos

When Outsurance was launched in a depressed market in 1998, its catchy advertising (who doesn’t know that you have to call 08 600 60 000), the vibrant green and purple branding and an innovative approach to short-term insurance soon captured the imagination of the public. By 2003 turnover had hit
R1 billion. Last year, net earned premium income increased by 24% to R2,1 billion. Entrepreneur spoke to joint CEO Willem Roos to find out more about how the founders of the company perfected the direct insurance model.

Monique Verduyn



Willem Roos of Outsurance

Willem Roos met Howard Aron and René Otto in 1996, when they were all working at Aegis,  a company in the Rand Merchant Bank Holdings (RMBH) group. They researched and developed the concept behind OUTsurance and presented it to the RMBH board.

Laurie Dippenaar was impressed and he asked the three to conduct some more research, draw up a business plan and present a business case. They did, and Dippenaar liked what he saw. The board approved funding for the concept within eight weeks and the rest is history. Otto left the business in 2001, but the RMBH board recognised the combined strengths and common vision of Roos and Aron and appointed them as joint CEOs.

Roos, Aron and Otto had complementary skills. “René was a true visionary,” says Roos.

“He had a huge amount of experience in the short-term insurance industry. Howard is an IT expert and was able to build the platform for the actuarial rating and underwriting, the claim management and the costs that differentiate our business. I was only 25 at the time but I was hungry and, being an actuary, I had a good feel for the numbers.”

The OUTsurance business model is simple and is based on superior risk management through innovative product design. An actuarial rating and underwriting approach plus effective cost and claims management rest on the base of an efficient information technology platform.

How long did you take to complete the research?

We did it in a number of weeks. I don’t want to sound glib, but the idea was already very clear in our minds and we had a huge amount of detailed financial knowledge. The most important component was really to determine what we were going to do that would give us a competitive advantage. I cannot stress enough how important it is to do the numbers. If you cannot make your business work on paper, don’t do it.

What trials did you face in year one?

I was so young back then that I never had any doubt it would work. We were fortunate in many ways given that we launched a new company in an industry that was highly competitive and capital intensive, but we had the right skills and the right plan.

Many new opportunities came along, but we made sure we did not become derailed. A good strength of ours is to be focused and single minded. I do remember that whenever we deviated even slightly from our core intention, things would not go as planned and we would simply stop and refocus. In an already complex business, it’s vital that you do not overcomplicate your environment.

What were the highlights of year one?

We launched on 26 February 1998 and when the advertisements played on radio the phones started to ring and they have not stopped since.

What were the key components of your research?

I am not the biggest fan of research as it sometimes impedes action. However, the most important component of our research was a thorough understanding of our competitive advantage. We also devoted a lot of time to building financial models.

To this day I think Excel is the best thing since sliced bread. Financial dynamics are what make an organisation successful quickly – a good financial model enables you to break- even more rapidly, which in turn enables the business to grow rapidly.

What were the key aspects of the business plan?

Our success is largely attributable to the fact that we underwrite risks accurately. To do that you need very good systems in place, as well as great actuarial skills. Because we deal directly with clients, we cannot rely on brokers to give good service – we therefore place a strong emphasis on our marketing strategy and our customer service standards.

Uniqueness was another aspect of the plan. We figured that as we had the opportunity to start a new company, we may as well create something that was different and fun. Ultimately, we sold the business on systems, processes and underwriting. Most of our competitors are not as sophisticated in that arena.

Once the results of the research indicated potential, how did you go about building the business plan?

We did not go to a textbook, but we gave an overview of the proposed business, an analysis of the industry, and the perceived weaknesses of the industry. We also discussed our main assumptions, our costs estimates, and the kind of customer experience we wanted to deliver. It was extremely detailed, down to noting when we would appoint each new call centre person in line with our projected growth.

How did you obtain funding?

After we presented the concept to the RMBH board, it took two months for the board to agree and they provided us with R120 million start-up capital on an incremental basis. In the end we used only R90 million of that. Our experience was quite unique in that we were fortunate to be part of Aegis, in which RMBH had a stake.

Because we worked within the group there was a great deal of trust right from the start. In the first two years, we lost R55 million before turning cash positive. The business plan had estimated a loss of R53 million, so we did not do too badly given that our set-up costs were enormous.

I have to stress that we were not ostentatious in any way, and we still do not spend on things that are unnecessary. Our premises are comfortable without being showy.

What are the key attributes you look for in your staff?

Before skills, we look for attitude, drive, ambition and passion. Skills can be acquired, but these other qualities are either inherent to the person or not. I always ask job candidates “what have you done that has added the most value to the company where you work now?”. If they can answer that question then I know that they can help to improve our business.

How do you go about the hiring process?

Initially, we were determined not to have an HR department, but of course we soon found that it was impossible to function without one. We have a fantastic corporate culture and we are good at managing it. That said, companies are always under pressure when they recruit.

In our case, because we have grown so quickly, we are probably not always as consistent as we should be. We have a fairly high staff turnover in the call centre, which is an area I would like to address in future, but which is probably due to our tough performance culture. But we pay well and, as a result, we also have a number of highly qualified senior people who manage the call centre.

Complex calculations are at the heart of the OUTsurance business design. How do you eliminate the potential of error?

The only way to manage risk is to employ very competent people. Being an actuary myself, I know that our financial people have to be able to combine science and art. Having the right people in place is usually more important than other checks and balances.

Obviously, good systems are key. From the beginning we built a technology platform that would be able to handle up to 10 million clients. Any big financial institution is dependent on systems. With our business model a robust technology platform is crucial. Howard built an industrial strength system on a shoestring.

How do you drive innovation at OUTsurance?

We reward staff members who come up with the best new idea every month, but we do not have innovation programmes in place. I don’t believe in that. Innovation ultimately comes from appointing the correct people and allowing them the freedom to explore.

Because our business model itself was so innovative, we are constantly focused on tweaking our processes incrementally to give clients better service by reducing claim times, improving the experience of our service, and making it more consistent.

Our biggest innovation has been the OUTbonus, a world first which rewards customers who consistently do not claim on their insurance policies. Skilled people using sophisticated systems ensure that the company delivers on its promise – “you always get something out.”

Essential OUTsurance, which offers affordable cover for vehicles that are worth less than R50 000 and older than five years has also been an important innovation. We are targeting the 65% of vehicles on South African roads which are currently uninsured. The vast majority of these are older vehicles where drivers argue that the cost of cover is too high considering the value of these vehicles.

What do you do to build and maintain loyalty?

Our product is designed to build customer loyalty because it is a built on a progressive system of financial reward. Loyalty was one of the key aspects of our business which we identified upfront. We spend a vast amount of money on acquiring customers, and they only become profitable to us if they remain with the company for several years.

As a result, we rate awesome customer service very highly. It is one of the cornerstones of the business. It is part of our culture and part of our value system. Also, our remuneration system is performance-based  and we incentivise good customer service. We monitor a variety of customer service measures on a daily basis.

Advice on developing a business model

  • Know what your competitors are doing, but don’t focus on that.
  • Make your processes methodical. After a while that level of performance and dedication becomes the norm.
  • Make sure you stick to your principles and do this long enough to gain momentum.

Advice on differentiation

Understand your differentiators. You should be able to explain them eloquently in two minutes so that your grandmother can understand them! Differentiation is like a big moat that you build around your business. Differentiators are created over time, provided you have the discipline to implement what you learn – it’s not about being clever, but about having tenacity.

Advice on sales

  • Senior management must micro-manage sales. I still run daily sales reports.
  • Sales and marketing is the lifeblood of the business. The worst thing you can do is to skimp on these two functions. Cut back on the coffee, but not on the marketing budget.

OUTsurance’s performance

The OUTsurance group is active in the short-term insurance market and continues to grow and perform extremely well. It has become an established and trusted brand in a relatively short period.

OUTsurance posted excellent results for the year ended June 2006:

  • Net earned premium income increased by 24% to R2,1 billion (2005: R1,7 billion)
  • Headline earnings increased by 24% to R369 million (2005: R297 million).
  • A 1,4 times covered dividend of R263 million was declared for the year (2005: R210 million).

At 30 June 2006 OUTsurance had total assets of R2,1 billion (2005: R1,8 billion) with a solvency margin of 43%. New business volumes from all sources continue to be encouraging. Given the dramatic drop in the underwriting profits reported by most of OUTsurance’s competitors, the expected hardening of premium rates is beginning to materialise.

As a result of OUTsurance’s disciplined approach to underwriting, it is well placed to benefit as this process plays out. RMBH’s attributable share of OUTsurance’s headline earnings for the year amounted to R234 million (2005: R194 million).

What are the three most critical factors that have determined the success of OUTsurance?

  1. The right team with the right skills.
  2. A business model that focuses on competitive advantage.
  3. A marketing strategy that is backed by an ability to sell.

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

Entrepreneur Profiles

6 Lesson Gems From Appanna Ganapathy That Helped Him Launch A High-Growth Start-Up

Twenty years after first wanting to own a business, Appanna Ganapathy launched ART Technologies, a business he aims to grow throughout Africa, starting with Kenya thanks to a recently signed deal with Seacom. As a high-growth entrepreneur with big plans, Appanna spent two decades laying the foundations of success — and now he’s starting to collect.

Nadine Todd




Vital Stats

Like many entrepreneurs before him, Appanna Ganapathy hadn’t even finished school and he was already thinking about his first business venture. A friend could secure the licensing rights to open Nando’s franchises in Mozambique, and they were very keen on the idea — which Appanna’s mom quickly dampened. “You can do whatever you want,” she said. “As long as you finish your degree first.”

Unlike many other entrepreneurs however, Appanna not only finished his degree, but realised that he had a lot of skills he needed to develop and lessons to learn before he’d be ready to launch the business he wanted.

“We launched ART Technologies just over two years ago. If I had started any earlier, I don’t think I would have been as successful as I am now,” he says.

Here are six key lessons that Appanna has learnt along his journey, which have allowed him to launch a high-growth start-up that is positioned to make an impact across Africa.

1. You don’t just need a product – you need clients as well

Business success is the ability to design and execute a great product and solution, and then be able to sell it. Without sales, there is no business. This is a lesson Appanna learnt while he was still at university.

“I was drawn to computers. I loved figuring out how they worked, playing computer games — everything about them,” he says. “My parents lived in Mozambique, and during my holidays I’d visit them and a friend who had a computer business. I helped him assemble them and thought I could do this too while I was studying. I convinced my dad to buy me a car so that I could set up my business — and never sold or assembled a single computer. I delivered pizzas instead.”

So, what went wrong? The simple truth was that at the time Appanna had the technical skills to build computers, but he lacked the ability to sell his product.

“If someone had said, ‘I’ve got an order for 30 computers’, I would have filled it — but to go out and get that order — I didn’t really even know where to start.”

2. Price and solution go hand-in-hand

As much as you need the ability to sell your solution, you also need a market that wants and needs what you’re offering, at a price point that works for everyone.

In 2007, Appanna was approached by a former supplier whom he had worked with while he was based in Mozambique. The supplier had an IT firm and he wanted to expand into South Africa. He was looking for a local partner who would purchase equity shares in the company and run the South African business.

“I loved the opportunity. This was something I could build from the ground up, in an area I understood well,” says Appanna. The firm set up and managed IT infrastructure for SMEs. The value proposition was simple: “We could offer SMEs a service that they could use for a relatively low cost, but that gave them everything an enterprise would have.”

The problem was that although Appanna and his team knew they had a great product, they were competing on price with inferior products. “If we couldn’t adequately unpack the value of our solution, an SME would choose the cheaper option. It was a big lesson for me to learn. It doesn’t matter how good the solution is that you’re offering — if it’s not at a price point that your target market accepts, they won’t choose you.”

It was this understanding that helped Appanna and his team develop the Desktop-as-a-Service solution that ART Technologies now offers the SME market.

“While I was developing the idea and the solution, I needed to take three key things into account: What do SMEs need from an IT infrastructure perspective, what is the most cost-effective way to offer them that solution, and what will the market pay (and is it enough to cover our costs and give us a small profit margin)?”

Appanna’s experience in the market had already taught him how cost-conscious SMEs are, and so he started developing a solution that could deliver value at a price point SMEs could accept. His solution? A unique Desktop-as-a-Service product that combines all the processing power and Microsoft products a business needs, without any capex outlay for servers or software.

“It’s a Cloud workstation that turns any device into a full Windows computer,” Appanna explains. “We hold the licences, and our clients just access our service. A set-up that would cost between R180 000 and R200 000 for 15 users is now available for R479 per user per month.”

It took Appanna and his partners time to build the solution, but they started with the price point in mind, which meant a solution could be designed that met their needs as well as the needs of the market.

“Too many businesses set everything up, invest in the solution, and then discover they can’t sell their product at the price point they need. My time in the market selling IT and infrastructure solutions gave me invaluable insights into what we needed to deliver on, and what we could realistically charge for our service.”

3. Get as much on-the-ground experience as you can


The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.

“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”

Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”

4. Stay focused

Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.

“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”

“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”

Appanna chose his partners carefully with this goal in mind.

“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.

“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.

“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”

5. Reputation, network and experience count

Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.

Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.

“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”

Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.

His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”

Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”

One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”

“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”

Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.

6. Start smart and start lean

Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.

Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.

First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.

Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.

“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.

“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.

The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”

Into Africa

Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.

“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”

From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”

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Entrepreneur Profiles

Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)

All over the world kids are abandoning the traditional notion of choosing a career to pursue until retirement. Gen Z aren’t looking to become employable job-seekers, but creative innovators as emerging business owners.

Diana Albertyn



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Do kids have an advantage or disadvantage when it comes to starting and building a company? It depends on how you look it. Juggling school, friends, family and other aspects of childhood and adolescence comes with its own requirements, but perhaps this is the best age to start.

“Being an entrepreneur means having to learn, focus, and connect to people and these are all traits that are valuable throughout life. Learning this when you are young is especially crucial, and will set you up for success and to be more open to other opportunities,” says billionaire investor, Shark Tank personality and author Mark Cuban.

Here are some of the most successful kidpreneurs who have cashed in on their hobbies, interests and needs to start and grow million dollar businesses borne from passion and innovation:

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Entrepreneur Profiles

30 Top Influential SA Business Leaders

Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.

Nicole Crampton



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Entrepreneurship is said to be the answer to South Africa’s unemployment challenges and slow growth, but to foster entrepreneurship we ideally need business leaders to impact grass root efforts. Business leadership is vital to improved confidence and growth. These three titans of global industry say:

  • “As we look ahead, leaders will be those who empower others.” – Bill Gates
  • “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours.” – Elon Musk
  • “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.” – Steve Jobs

Here are 30 top influential SA business leaders forging the path towards a prosperous South African future.

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