South African insurtech platform Naked has raised $11 million in a Naspers-led round. Existing investors Yellowwoods and Hollard also participated in the funding round.
This comes barely two weeks after Naspers, via its early-stage tech investment vehicle Naspers Foundry, invested in another South African insurtech platform, Ctrl, in its $2.3 million Series B round.
Naked’s latest investment is a Series A round. According to a statement released by the company, Naspers Foundry invested $8.3 million as the lead investor — the largest the Naspers investment vehicle has made so far.
Founded in 2018 by Alex Thomson, Sumarie Greybe and Ernest North, Naked is a digital insurance platform covering cars, content, homes and standalone items. The company says it employs artificial intelligence to create new processes and experiences for its customers.
Africa’s insurance sector is worth more than $68 billion in annual gross written premiums. South Africa makes up 70% of this market, with an annual gross written premiums market of over $47 billion. However, only a fraction of personal insurance is sold without human intervention.
But the pandemic has changed the way South African millennials want to consume insurance products these days. While 28% of South African millennials are in the market for insurance, 60% of them would prefer communicating with their insurer via the internet. For insurers, this online automation can reduce the cost of a claims journey by 30%.
This is where Naked comes in. On the platform, customers are presented with lower costs than they would ordinarily see in traditional insurance platforms, and more importantly, they have more control of their insurance experience.
“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,” said the company in a statement.
Naked is built so that it does not plug into other insurance products in the market. Instead, the company built the product from the ground up, which allows it to add features that resonate with its customer base. One such feature allows customers to pause their car premiums whenever they’re not driving during the lockdown. It is methods like this that Naked takes into consideration to improve insurance experiences for consumers.