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CX Summit: How Naked disrupted the status quo in insurance

Christopher Tredger
By Christopher Tredger, Portals editor
Johannesburg, 14 Sept 2023
Ernest North, co-founder of Naked Insurance.
Ernest North, co-founder of Naked Insurance.

Customers want simple, efficient, and cost-effective insurance, without the risk of being blindsided by devilish fine print, says Ernest North, co-founder of Naked Insurance.

The digital-first insurtech company entered the market in April 2018 and began with an AI-based car insurance offering. It has since expanded into buildings and home contents cover, and insurance of standalone items, such as cellphones.

North is scheduled to present at the ITWeb CX Summit 2023, to be held on 5 October at the Maslow Hotel in Sandton, Johannesburg.

Speaking to ITWeb ahead of the event, North says he will detail the benefits of building a data-driven customer experience, how to avoid the ‘everything-for-everyone’ trap while still giving a hyper personalised CX, and how to turn transparency into a competitive advantage.

The basic premise of his discussion is that for many years the insurance industry has been operating on systems that require some form of human involvement on the side of the provider. Not only does the lack of self-service limit the customer’s ability to easily control their cover, but it also adds a significant layer of cost.

North says the margins in the insurance industry are so tight, and the consumer is so focused on getting the best financial deal "because the product itself is not a physical, tangible product that you hold in your hand, it is purely the promise of cover. For the most part, you can get a similar promise from a whole bunch of people and to that extent it is commoditised. If we can use technology to deliver this product in a significantly more efficient manner, and cut costs significantly, those cost savings can be passed directly onto the consumer in the form of lower premiums.”

100% digital CX

Core to Naked’s strategy is being a 100% digital business.

“Our digital interface, our website and app, is the only place where the customer transacts with us,” says North. “There is a customer support desk (phone and e-mail) for general assistance, and of course a 24/7 emergency line for towing and roadside assistance, but actual transactions all happen online. You can only get a quote on the website or app, and if you want to buy the policy, or make a change, or even cancel, you must do it there. It’s a one-hundred percentage self-service model.”

North explains that one of the reasons for this is the value that can be unlocked if everyone goes through the same channel, specifically, the value of the big data and AI.  "Not only are we unlocking convenience and cost savings for the customer by having this fully digital channel, but the fact that all consumer interactions are done on a digital channel means the volumes of data are just not even comparable to what a traditional insurance or financial services business has.

“Having this enormous set of data at our disposal and then building the AI to supplement traditional analysis, gives us new ways to gain insights that are – especially in the case of an insurance business – incredibly valuable,”  he adds.

Is it for everybody?

North says there may be some consumers who do not feel comfortable just using digital channels to engage the business. However, that group seems to be a very small minority, for example high net worth individuals, with a complex set of assets, preferring to utilise a broker.

Naked Insurance has seen a steady increase in its customer base, reflecting digital comfort across a diverse demographic of customers.

North will present a case study on how Naked built a data-driven customer experience and used transparency as a competitive advantage.

For more information and to register, go to ITWeb CX Summit 2023.