Brokers are invited to join the King Price expansion
Gideon Galloway, CEO, King Price
After spending a year establishing itself as one of South Africa’s fastest growing short-term insurers, King Price made the decision on 1 September to diversify its insurance model by expanding it to now also include the broker market. The company reports that the main motivation behind this is that King Price feels that consumers need choice and the constant demand from numerous brokers could no longer be ignored.
"Brokers will add a lot of value to our business model as we can now enter a market that we previously did not have access to. We want to make insurance affordable for everybody. Some clients just prefer to work through brokers,” says CEO Gideon Galloway.
Since the company's launch around 14 months ago, they have gained more than 35 000 policyholders; covering car, buildings and all other short-term insurance items. Galloway adds that the company is still growing at an average pace of more than 4 000 new policies per month.
Benefits to the broker?
Brokers throughout South Africa, who are registered financial service providers (FSPs), can now apply to become part of the King Price family. "There are many reasons why brokers should join us,” says Galloway. "Firstly, we offer a unique insurance pricing model where we decrease car insurance premiums monthly, as the value of the car depreciates. And secondly, we have low attrition rates when compared to the rest of the industry.
He adds that incorporating a broker based model with its existing direct model is an easy fit. He points out that commission will be fairly structured according to industry regulations. "There will also be no cross pollination between our direct and our broker driven business” says Galloway.
Brokers will be backed by the benefits of a traditional broker support service that is enhanced by modern technology. Business will mostly be done telephonically and King Price will handle all of the administration, the broker will have no extra paperwork.
No change in price
When King Price launched in 2012, it launched with the premise that insurance premiums would decrease monthly as the value of a car depreciates. While this is a model which is suited towards a direct insurer, it might pose a problem with a broker centred model. However, Galloway says that higher closing ratios and extremely low cancellation rates will more than counteract this.
He points out that the client will pay the same rate as when he goes direct. "If a client's financial affairs have been handled by a trusted broker for many years, why should he or she deal with anyone else? We'll rather bring cheap premiums to clients by making it available through brokers too. For us, it makes no difference whether we're paying for advertising or paying brokers' commission. As long as our clients get the best premium possible,” says Galloway.
Editor's Thoughts:
By following this model, King Price will be joining the ranks of a number of other insurers who follow a direct and broker led distribution model. This diversification model has proven to be fairly successful in the past, can King Price follow suit? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
Comments
Are their insurance products available directly or through brokers…
Insurance companies, who make use of brokers to recruit new clients for them, pay them substantial sums of commission and incentives. These insurance companies’ income is generated from insurance premiums paid by their clients. It is therefore safe to assume that the consumers are actually paying the brokers commission through increased premiums. It would make much more sense to directly deal with insurance companies like King Price Insurance, where we underwrite all of our own insurance products.
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If a broker consultant can contact us, we would appreciate it. Report Abuse
kind regards Report Abuse