There have been significant efforts to increase insurance uptake across Africa, where reports show a very low market penetration for insurance products.
In recent days, we’ve seen digital companies making a good attempt to disrupt the market with products that reduce the paperwork and hasten the onboarding and payout processes. In Kenya, Lami Technologies is a good example of insurtech companies creating a digital revolution.
Down in South Africa, Naked, a digital insurance company founded in 2018 has announced its newest funding success in which it raised $17 million in a Series B round. The round was led by International Finance Corporation, with participation from the German Development Finance Institution, Yellowwoods, and Hollards. Naked has now raised a total of $31.6 million.
Alex Thomson, Sumarie Greybe, and Ernest North founded the company with the idea to improve insurance access on the continent. Through the company’s app and website, users can purchase a policy for their homes and cars in a matter of seconds, with the approval rate much faster than the traditional insurance landscape.
“We have been overwhelmed by customers’ enthusiasm for our offering and have exceeded our growth targets every year,” said Thomson, “We are excited to bring new investors on board in this funding round as part of accelerating our growth plans. This investment validates our position as a pioneer of fully digital insurance in South Africa, and will enable us to grow our team, continue to invest in technology that puts customers in control, and expand into new markets.”
Through the company’s integrated AI, Naked customers can get a quote, purchase a policy and manage it all without speaking to a contact centre agent. The startup’s AI-based system offers unmatched customer convenience, and also enables the company to reap significant cost savings from automation, which then means customers get premiums at lower rates.
Naked charges a fixed percentage on customers’ premiums and where claims are low, the excess goes to causes chosen by the users, which is one of the distinguishing products it has introduced in the market.