Insurtech Naked offers fully digital car, home insurance

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Ernest North, co-founder of Naked.
Ernest North, co-founder of Naked.

South Africa’s first end-to-end artificial intelligence (AI)-driven insurance platform, Naked, has launched fully digital car and home insurance, which allows customers to get comprehensive, instant and hassle-free cover for their home through an automated digital process.

Naked announced today that its product range now includes home cover (building insurance up to R10 million) and contents insurance (up to R2.5 million). Additionally, the company says the new offerings leverage its automated, front-office to back-office processes to enable consumers to purchase cover through the mobile app within seconds.

Naked’s customers can now get a quote from chatbot, Rose, in 90 seconds and sign up for home and contents insurance in under three minutes – completely online and with no need for a phone call, it says.

Clients can also claim from, manage, change and cancel policies from the app without the need to speak to a call centre agent.

The start-up was co-founded by actuaries – Sumarie Greybe, Alex Thomson and Ernest North – who all have backgrounds working for leading insurance companies in SA.

Naked initially received a R20 million investment from private investment firm Yellowwoods and insurance group Hollard.

In December 2018, Yellowwoods and Hollard invested a further R30 million in the firm to enable it to accelerate its growth and expand into new product lines.

North says: “Since we launched South Africa’s first AI-native car insurance product, many of our customers have asked when they would be able to insure their homes and possessions with us too.

“Because it was always our plan to leverage our AI, automation and machine learning technology to offer a comprehensive product suite, we are excited to answer this request with our home and contents product range.

“Naked’s car insurance offering has enjoyed strong uptake among tech-savvy people who are looking for a more convenient, digital experience and more affordable premiums than they can get from traditional insurers.

“Early user testing indicates this same market will be among the most enthusiastic adopters of Naked’s home and contents cover.”

No human intervention

According to the company, its home insurance products are built on digital systems and processes, and because it does not run legacy systems or manage a large call centre infrastructure, Naked can pass premium savings onto to its customers.

“When customers get quotes for their homes, contents and portable possessions, they are able to see how the quote changes in real-time as they add or remove items or adjust the excess payment.”

Naked says because it sells to and services customers entirely through digital channels, it means clients do not need to negotiate with a call centre to get the “correct price” when they get their initial quote, or when it is time for their annual premium adjustment.

“This automated process and an easy cancellation process means customers can be confident they are always charged a fair premium.”

Furthermore, the insurance company notes it fast-tracks the majority of claim pay-outs. “For example, people who pass the automated fraud analytics receive near-instant approval for their replacement or repair of their property to commence.”

It says this technology makes it faster and easier for people to claim for damaged or stolen possessions, addressing one of the common pain points in home insurance.

“Unlike traditional insurers, Naked takes a fixed portion of premiums to run the business, with the balance going into a pool to cover claims. Money left over in the claims pool goes to charities nominated by customers rather than towards company profits. This means Naked has every incentive to keep customers happy by paying reasonable claims since it does not profit from lower claims pay-outs.”

Naked was the overall winner at the MTN Business App of the Year Awards 2019 in October.

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