Patrice Motsepe’s African Rainbow Capital (ARC) bought a 25 percent stake in Capital Legacy, with the acquisition completing its participation in the entire financial services value chain. Photo: Karen Sandison/African News Agency (ANA)
Patrice Motsepe’s African Rainbow Capital (ARC) bought a 25 percent stake in Capital Legacy, with the acquisition completing its participation in the entire financial services value chain. Photo: Karen Sandison/African News Agency (ANA)

10 top tips for insurance entrepreneurs

Time of article published Aug 5, 2020

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By BR Correspondent

JOHANNESBURG – “Being battle-hardened is what makes you hungry for success. Growing up in a house where your parents can’t cover the school fees and the family car has broken down for the umpteenth time, makes you focus on what you really want to change in your life.” says Alex Simeonides, CEO of Capital Legacy, a specialised Will drafting and estate administration company.

Having started work at a young age, as a waiter, water bottle delivery man and then as an insurance broker Alex Simeonides insists that its lessons from the hard knocks along the road to success that helped him turn an industry shortcoming into a company worth just under R1 billion in less than eight years.

Here are 10 of his top tips on how you can make your insurance business fly.

1. Work your way up

A waitering job may feel like a lot of sweat for nothing, but it can teach you skills that are invaluable when you are growing your business.

“As a waiter you need more than grit – you need to be able to flip bad situations into good ones. That means convincing a client who is screaming at you because they got the wrong prawn dish to buy a good bottle of wine. Waitering also teaches you to handle pressure, think on your feet, put in the long hours and to sell – all necessary when you’re building a business from scratch.”

2. Get it in writing

In his early twenties, Simeonides joined a watercooler business delivering prepaid water to offices. The stint taught him how to build systems and processes to scale the business so that it didn’t require micro-management. “In retail, the skill is to look at something on paper, connect the dots and create scale quickly,” he adds.

That experience also taught him a hard lesson when the owner sold the business from under him, without compensation. “You can put in the hours and the intellectual property, but if you don’t have a contractual stake – you don’t get the benefits.”

3. Test your creativity

By the age of 25, Simeonides was one of the top 10 insurance advisors in the country. By 27, he was ready to retire. “The only problem was that I got bored,” shrugs Simeonides. “The most frustrating part was that I wasn’t able to express myself – I was simply selling other companies’ products, there was no creativity involved.”

It was while he was processing a claim after one of his clients passed away that Simeonides had his ‘Ah-ha moment’. While the Will was being executed, the widow was faced with a huge lump of fees related to her husband’s death. That, quite simply, is how Capital Legacy was born – offering clients free Will-drafting services with cover for estate administration fees and costs.

4. Understand your market

Because Simeonides had learnt the ropes as an insurance broker, he was able to connect with the broker fraternity from the get-go. “I can talk their language; we’re cut from the same cloth and that has helped me to slowly earn the trust of more than 4 000 brokers with whom we work.”

5. Make each client feel special

The key to the company’s stellar growth trajectory, says Simeonides, was designing IT infrastructure that allows financial advisors to engage each client personally making them feel like an individual, rather than a number.

“I wanted to make sure that the client would never know that there was an entire ecosystem operating in the background. Discussions around death and Wills are difficult – you’re looking someone straight in the eye and talking about their mortality. At that moment of vulnerability, the client needs to feel special and that they aren’t getting a mass-produced offering, but rather a bespoke service especially for them.”

6. Choose the right partners

Starting out with his assistant from his practice, his father, and Carl Sonday and Eduann Vorster who are still business partners to this day, Simeonides soon began building scale that started attracting the attention of the large, established insurers. Soon the disruptive start-up was processing 5 000 Wills a month and 1 000 estates a year and the company soon grew from a handful of staff to 350. “We were growing at 30%+ per year, but growing businesses are cash-hungry, and we needed to bring in a partner,” says Simeonides.

Last year, Patrice Motsepe’s African Rainbow Capital (ARC) bought a 25 percent stake in Capital Legacy, with the acquisition completing its participation in the entire financial services value chain. Because the business doesn’t compete with ARC’s other investments the relationship has brought opportunities to leverage off each other’s capabilities and client base.

7. Integrate the right technology

Pulling the fiduciary system into the digital age meant he had to work hand-in-hand with developers along the way. “But it’s suicide for an entrepreneur to completely outsource the IT capabilities of a growing business to developers,” he adds. “You need to educate yourself and be able to understand what is going on in the background, to immerse yourself in it. It is like understanding how the kitchen works when you’re a waiter.”

8. Work as an industry when it comes to regulation

Simeonides has advocated for the requirement of a ‘wet’ signature on Wills to be done away with and for e-signatures to be considered valid in a court of law. “We’ve also learnt that to be disruptive you may need to spearhead regulatory changes that can help not only your own company but the industry as a whole.”

9. Keep close to the business

Simeonides still goes ‘undercover’ as a client and financial advisor to test Capital Legacy processes from the viewpoint of a client. “It’s not only about building trust; it’s about building confidence by being an expert and making complicated things understandable for your client.

10. Invention versus innovation

“Innovation doesn’t drive disruption,” says Simeonides. “The real game changer is invention.”

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