The concept of spreading risk dates back to the Code of Hammurabi from around 1750 BC in Babylon. In the case of a voyage, merchants could take out a bottomry contract – a maritime agreement where the borrower, often a shipowner, pledged the hull of their vessel as collateral. Matters have evolved: while bottomry was a private agreement, in the case of the Strait of Hormuz closure, war-risk premiums spiked to between 1% and 5% of the ship’s hull value, or between $1mn and $15mn per transit.
Retail insurance products have also undergone a sea change. Naked Insurance and Pineapple launched to the public in 2018 and both have focused on what gives them a competitive advantage: technology. Sizwe Mase, business development lead at Root Platform, a low-code, end-to-end insurance technology platform, says the average customer will now benchmark the ease-of-use of their insurance products with other platforms. “No customer wants to have a quick and easy experience on their banking app and have to endure a very slow and tedious experience when dealing with their insurer,” he says.
Root was founded in 2016 and operates in South Africa, Mauritius and the UK, with more than 100 products live in the market and over 500 API endpoints, from a quote through to accessing publicly available documentation. Digital insurers use APIs to connect to systems and data sources, such as Home Affairs, for a real-time identity check. Traditional insurers, with legacy infrastructure, will find it difficult to deliver the same level of efficiency.
Sumarie Greybe, co-founder of Naked Insurance, says real-time data enrichment is particularly important. “Where possible, we retrieve information about a vehicle, an address or a risk profile on the customer's behalf, rather than asking them to supply it themselves,” she says. “This reduces the number of questions customers need to answer and is a large part of what allows a Naked quote to be completed in under 90 seconds.”
No customer wants to have a quick and easy experience on their banking app and have to endure a very slow and tedious experience when dealing with their insurer.
Sizwe Mase, Root Platform
The company built its own cloud-based technology platform, says Greybe, which allows digital insurers to connect quoting, underwriting, policy administration and claims into a single digital journey.
Naked Insurance runs a cloud-native stack without any legacy insurance systems. According to local technology recruitment site OfferZen, its tech stack includes React, and it’s using Amazon’s API Gateway. It’s also using AWS as its cloud, and S3 for file and document storage. For compute, it’s using EC2 and Lambda.
In May, Naked Insurance became the first local insurer to launch a native app on OpenAI’s ChatGPT platform. In the app, customers can receive a final, binding car insurance premium, not just an estimate.
This is a world first. According to Greybe, the Naked claims bot, called Jade, guides customers through the initial claim conversation using natural language. The bot gathers the information the company needs to start processing the claim without requiring the customer to complete a lengthy form.
Most people prefer to use their phone or laptop to interact with their insurance provider, says Greybe. Consumers want it to be as easy to get a final insurance quote as it is to get a flight price online. They also want the experience of managing and cancelling their policies to feel as effortless as using a smartphone banking app.
Customers now expect technology to handle routine interactions, but they also want to connect with a person when they need to. “Automation and AI help Naked assess straightforward claims efficiently and almost immediately, while more complex cases are referred to experienced claims professionals,” she says.
According to LinkedIn profiles, developers at King Price Insurance are expected to have experience working with Microsoft Azure. It’s also on record as saying that it uses AWS, and Genasys for its insurance platform, as well as using WhatsApp to handle simpler customer interactions, such as updating personal details and doing car self inspections, says Annemarie Pienaar, head of client care at the company.
WhatsApp serves as an entry point for customers and can manage smaller claims without clients needing to speak to an agent. As a result, Pienaar says the number of phone calls King Price receives has decreased significantly over the past three years. “With technology handling simpler queries, our people have more time to focus when human interaction matters most,” she says.
If an insurer takes a long paper form and turns it into an equally long online form, the admin burden has simply moved from one channel to another.
Sumarie Greybe, Naked Insurance
DataEQ’s ‘South Africa Insurance Sentiment Index 2025’ says claims were the largest operational pain point for insurance customers. The study found that the greatest drivers of complaints in the claims process were: waiting weeks without a status update (67%), unexplained and apparently unfair claim rejections (30%), and unnecessary bureaucracy (20%).
Initiating a claim and submitting supporting information usually involved a lot of back-and forth, says Greybe. Intensively manual claims processes can be particularly frustrating for customers who need home or vehicle repairs. She says insurers looking to innovate may simply digitise an inefficient and ineffective process. “If an insurer takes a long paper form and turns it into an equally long online form, the admin burden has simply moved from one channel to another,” she says. “This also applies to a basic chatbot that cannot understand a customer’s question, or provide a useful answer. Rather than reducing friction, it can create more frustration.”
Naked customers can submit a claim and upload information such as photographs of a damaged car or burst geyser through the app, at any time, and don’t need to speak to a claims agent. Insurtechs are also challenging the economics and operating model beneath insurance.
In a traditional insurance model, lower claims costs contribute to higher profits, which means the insurer benefits from paying fewer claims. The company now follows a business model called Naked Difference that removes this conflict of interest, says Greybe. “We take a fixed percentage of customers’ premiums, and use the remainder to pay claims.
Any surplus left in the claims pool at the end of the year is donated to causes chosen by our customers rather than kept as profit. This means Naked does not financially benefit from rejecting a valid claim.”
Proper digital transformation dictates that the insurer should examine each step in its processes, whether it’s really necessary, and whether any required information can be obtained or verified more intelligently, she says. “It involves redesigning the journey from the ground up.”
* Article first published on www.itweb.co.za
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