Tech-first, solutionist startup disrupts insurance industry

New kids on the block, Naked is stripping down the costs of car insurance and, rebuilding it with social impact and fairness.

RMB Solutionist Thinking is a podcast series hosted by Bruce Whitfield which focusses on great South African minds thinking differently and going against the norm. In this episode in the second series, Whitfield interviews the co-founders of Naked, Alex Thomson and Sumarie Greybe.

“What we’ve seen in the industry is that there are significant trust issues in the current relationships between customers and their insurers."

When three actuaries realised that the valuable insurance insights they were offering their clients were getting caught in bureaucracy and politics, they broke away from their consulting roles and co-founded Naked – an insurance company stripped to its knickers of all the unnecessary stuff.

Now, the co-founding actuaries of the emerging insurtech startup – Alex Thomson, Ernest North and Sumarie Greybe – who worked with South Africa's leading insurers, are disrupting the South African car insurance industry with its future-facing, 'Solutionist Thinking' approach, to get around the challenges that almost every one of us loathes when it comes to insurance.

We saw that the local insurance market seemed to be slow at getting themselves ready for the digital age.
Sumarie Greybe, co-founder – Naked Insurance

Traditional paternalism out of the way, Naked is stripping down the current, inefficient insurance model to present its clients – the younger market – with a transparent, affordable AI-based car insurance with a conscience, at a click of a button.

Layer by layer, this innovative insurance startup has peeled away the aspects of the old, traditional insurance model that we hate so much – allowing clients to bypass the long, painful calls with call centre consultants, skip the paper work and through its anti-fraud artificial intelligence, clients can get their cars insured in less than 3 minutes via their smartphones.

It's important that South Africa support businesses that want to take certain industries into the digital age.
Sumarie Greybe, co-founder – Naked Insurance

In the case of an accident, clients can submit claims on the app by answering basic questions, uploading pictures and a video explaining what happened and, by engaging with its chatbot, Rose. Depending on the claim, clients could be notified instantly or within an hour whether a claim will be paid out.

In addition, Naked allows its clients to control their cover, which includes – pausing their car insurance when going on holiday or when they decide to switch to public transport to get to work, changing insurers or canceling cover whenever they want and, getting unused premiums refunded instantly.

To overcome the insurance industry's notorious reputation for rejecting claims to avoid pay-outs, Naked became the first and, only insurer in South Africa to strip down and forgo underwriting profits. But, if getting claims paid is how insurance brokers make their money – one might wonder how Naked stays afloat? Naked collects a fixed 20% portion of premiums to cover its costs and, to make some profit.

Focused on perfecting the model, Thomson believes that "there's going to be a significant change in the way that insurance works.”