CEO INTERVIEW

At the age of 25, Willem Roos was part of the team that launched OUTsurance. In its nearly 20 years of existence, the short-term insurer has grown to be one of the biggest in the country and has enjoyed massive success in Australia. We caught up with Roos to find out about his business philosophy and what we can expect from this industry innovator going forward.

By Jana Jacobs

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on the money

Playing the long game

on the money spotlight

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started in 1998 by Willem Roos, René Otto and Howard Aron, OUTsurance has become a big player in the financial services sector, with 1m

policies in South Africa. In 2008, Youi (which provides personal lines short-term insurance cover directly to the Australian public) was launched in Australia, and expanded to New Zealand in 2014. OUTsurance also operates in Namibia.

So how did this company come to be?Roos and Otto met at Aegis – in which Rand Merchant Bank Holdings (RMBH) held a 50% stake – where they were both working at the time. Aegis was a very traditional insurance company in the sense that it was intermediary distribution based, and Roos and Otto identified three opportunities for doing things differently: cut out the middle man, develop a sophisticated underwriting system and improve customer experience. And all of this needed to be underpinned by strong systems.

The biggest challenge was building the systems. However, Aron and two to three programmers did an amazing job building everything, explains Roos. This left a lot of the original capital for the most important thing: marketing.

Think about it. Even if you aren’t insured with OUTsurance, you will immediately recognise the green and purple logo, know the number to dial, would have heard the R400-cash payout ads or been directed by its pointsmen.

So when did they know they had arrived?Roos reframes the question: “Look, I hope we never think we’ve arrived…rather, when did we think this thing wasn’t going to fall over?”

They managed to get their loss-ratio under control fairly quickly and about 18 months after OUTsurance had launched, they were almost at breakeven “and we knew we had something here”, says Roos.

At that stage, they were still not sure how big they would get, but once they were able to start paying their first OUTbonuses (paid to clients that go claim-free for three years), business really took off.

The people and the cultureWalking into the OUTsurance office in Centurion alone gives you an immediate sense that although this is big business (the office houses 2 800 employees), this is not your run-of-the-mill corporate. There are no suits and everything is open plan. Not even the CEO gets his own private office.

Roos believes strongly in the approach that “you must take business seriously, but not yourself”. If you are interviewing for a top post at OUTsurance and expect “your own office, a thick carpet and your own boardroom table, it’s not going to work out”, he says.

When it comes to top-brass remuneration or “the knowledge workers, key players and senior management” as Roos calls them, the company pays market-related salaries and provides them with an equity stake in the business. OUTsurance believes in the owner-manager culture, because, according to Roos, that helps you spend the company’s money as you would your own.

“We like entrepreneurial flair and risk-taking, but appropriate risk. In the corporate world you sometimes

Roos and Otto pitched the idea to the RMBH board on a shareholders’ day. Otto gave the presentation, while “I was just the guy who pressed the spacebar for the PowerPoint

presentation”, quips Roos. Although the concept of direct insurance

would not work within the intermediary-based framework of Aegis, the chairman of the FirstRand Group, Laurie Dippenaar, asked them to draw up a business plan. At this point Howard Aron came on board to build the systems that would serve as the

foundation for the business. The initial business plan wasn’t

approved because it required too much capital. After scaling down the plan, they presented to the RMBH board and within six weeks of the original shareholders’ presentation the team received the capital to start.

And so OUTsurance was built from scratch. A year later it launched.

“From the start we put good foundations in place because the vision was always to build a scaleable business,” emphasises Roos.

“From the start we put good foundations in place because

the vision was always to build a scaleable business.”

There are no suits and everything is open plan. Not even the CEO gets his own private office.

Willem Roos CEO of OUTsurance

The OUTsurance head office in Centurion, Gauteng.

The open-plan interior of the OUTsurance head office.

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GETTING TO KNOW WILLEM ROOSHow do you maintain your work/life balance?I actually think I maintain a very good balance. I spend very little personal time doing work stuff. I don’t go to golf days and I don’t go to functions after hours – I’m not sure that doing so adds much value to the business.

Fortunately with our business we deal with lots of small clients, so we don’t have to entertain them like many corporates do. I often get invited to attend events across the country and the world and I never do. If I have the time to do that, I would rather spend it with my wife and four boys.

I also believe that technology enables us to live a more balanced life. Some people suffer from digital overload, but it doesn’t bother me – I love it. I take lots of holidays and with technology, I can take my work with me. I’ll put in an hour or two a day and am always available on my cell. This allows me to spend a lot more time with my family.

What are you reading at the moment?This may come as a surprise, but I am reading the most fantastic (non-business) book: The Rosie Project by Graeme Simsion. It’s one of the funniest and most entertaining books I have read in a long time. I just finished Creativity, Inc. by Ed Catmull. The next one on the list is The Blockchain Revolution by Don and Alex Tapscott.

Best business advice you’ve received?Laurie [Dippenaar] told me: “You must think long term.” I think this is crucial because few people do. Many businesses are focused on the next three months’ results, and not the next five years. I believe this and acting with the utmost integrity are extremely important.

If not an actuary, what else would you have become?I would probably have gone into engineering or technology.

Which business minds do you admire?I think they are pretty much the usual suspects. Elon Musk is an amazing innovator and forward thinker. I also admire Amazon’s Jeff Bezos and I own all the latest Apple products, so definitely Steve Jobs. And then in South Africa, I find Laurie Dippenaar and the founders of the FirstRand Group to be a great source of inspiration. ■

on the money spotlight

“I must say, this is sort of the worst we have seen it,” says Roos. “We’ve even seen that general Google searches for car insurance have declined substantially. New car sales are down and second-hand sales have not really compensated for that drop. We haven’t seen a dramatic difference, but we have seen an increase in our lapse rates.”

Like many, Roos is concerned about SA’s dismal growth rate. “You can’t operate in an environment where you have zero growth. We are just going to have more unemployment. Our population growth is 1.7%, so GDP per capita is declining and people are getting poorer.”

Only a third of cars in SA are insured, a great opportunity that is not being capitalised on because “we are not creating a middle-class fast enough… and you can only do that by creating employment”. ■

ROOS ON THE ECONOMY:

THE POINTSMEN PROJECT

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get those who aren’t shareholders taking very big risks. If it comes off, they get a very big bonus. If not, the shareholders lose money and they just walk away.”

When you’re a shareholder, you tend to focus on sustaining profits in the long term, according to Roos, not chasing the short-term results.

What’s next?OUTsurance is now an incumbent in the very industry it entered almost two decades ago. So if Roos never wants to fall in the trap of thinking that he (or the company) “has arrived” and wants to continue innovating and adapting, what is next?

“We always look at expanding. Can our brand expand to other financial services? You need to balance that expansion with focus. We made the strategic decision to go to Australia and build business and that’s where most our efforts were focused,” says Roos.

At home Discovery has launched its own short-term insurance company and is in the process of applying for a banking licence.

“I think Discovery is probably becoming our biggest competitor. It’s a very disruptive, brilliant business with

lots of capital to back it up.” Would OUTsurance do

something similar? Without dodging the question entirely, Roos plays his cards close to his chest. “We’ll certainly keep looking to branch out our financial services offering but I can’t give you a clear roadmap.”

What he can say is that their approach would be slightly different to Discovery’s. Discovery caters for the higher-end market built around Vitality, “being

everything to everybody” and changing behaviour, says Roos.

OUTsurance is more about cost-effective cover, great service, and great value for money. “We want to build a quality product at an affordable price… We don’t sell BMW or Mercedes. We sell Toyota.”

One thing is certain: Roos won’t stop trying to get everything out. ■editorial@finweek.co.za

“I think Discovery is probably becoming

our biggest competitor. It’s a

very disruptive, brilliant business

with lots of capital to back it up.”

The Youi office outside Brisbane in Australia. OUTsurance launched the sister company here in 2008.

The first pointsmen service was launched in September 2005.

Over the past six years, motorists in Gauteng and Cape Town have become familiar with the OUTsurance pointsmen. Roos explains that all the credit should go to the OUTsurance marketing team for bringing this project to life. At its inception, Hugo Schreuder (who is now based in Australia having started Youi) headed up the marketing department in South Africa.

“Our challenge was that we had this huge marketing budget, but we were ‘shouting’ the same thing over and over – call us for affordable car insurance. So, instead of putting up a host of billboards, we wondered what we could do differently,” says Roos.

At the time OUTsurance thought of the idea, Colleen Bekker of Traffic FreeFlow came up with the same idea. It made sense for the two parties to join forces so Bekker runs the operation and OUTsurance sponsors the project, and also ensures that the correct legal framework is in place. The project is of no cost to the cities where the pointsmen operate – OUTsurance carries the full cost.

All the pointsmen are trained by the metro police and operate under the auspices of the metro. Thanks to the formal training, many of them go on to become traffic officers.

Roos says that at times it is challenging dealing with the metros, but from the outset the Tshwane and Johannesburg metro police had been fantastic partners and were very open to the idea. Durban has preferred not to use pointsmen.

The project has proven beneficial to both OUTsurance and the public. Roos says that the partnership with 702 has also provided great exposure for OUTsurance.

“I love the project and I think it works exceptionally well,” says Roos. The project has created jobs for 200 people who were previously unemployed. At present, there are 185 pointsmen operating in Tshwane and Johannesburg and there are 15 pointsmen in Cape Town, according to Roos. ■