Account Setup fails for Outlook.com accounts

When I try to add my Outlook.com account to Outlook via the Auto Account Setup wizard, I get several additional password prompts and finally the following error:

An encrypted connection to your mail server is not available.
Click Next to attempt using an unencrypted connection.

That process eventually also fails and I’m asked to verify my email address (which is correct) or set it up manually.

How do I do that and can’t Outlook really configure itself with Outlook.com?