Naspers Is Leading the $ 11m Funding Round

South African insurtech startup, Naked, has raised $ 11m from Naspers. The platform was founded in 2018 by Alex Thomson, Sumarie Greybe and Ernest North. As fellow insurtech players, the company uses machine learning and bots to process claims and customer requests. It currently covers cars, homes and standalone items.

“They can get a final insurance quote for their home, its contents, their standalone items or their car in less than 90 seconds, and switch or pause their cover, all online, without speaking to a contact center agent,” Naked by Tage Kene-Okafor for TechCrunch

South Africa As #1 Market

South Africa's annual gross written premiums stands at around $ 47B, representing more than 70% of the whole continent. Right now, only a small part of personal insurance is sold without human intervention.

However, over 60% of South African millennials would prefer to communicate with their insurer via the internet. At the same time, automation can reduce the costs of a claims by a 30% for insurers.

Flexible Contracts

Besides relying heavily on automation and machine learning, Naked also enables its customers to pause their contract whenever needed. As an example, users where able to pause their car insurance contract during the pandemic as they were not driving.

“Our ambition is to build insurance that people love by offering an experience that is affordable, convenient, and transparent. We have come a long way since our launch in 2018 towards meeting these goals” Alex Thomson

BENCHMARK’S TAKE

  • We doubt they will manage to generate considerable cost improvements that will enable them to cut prices
  • However, they might make the experience more pleasant
  • But, in a price-driven industry, will this matter?

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products.

Credits

Photo by Naked.