Financial services group Hollard has announced that it will invest R20 million into a new tech startup called Naked Insurance.
While full details about the group’s processes, plans and offers are under wraps until it launches in the first quarter of 2018, it says it will offer customers a “faster, fairer and more flexible insurance experience”.
The business will be led by actuaries Alex Thomson and Sumarié Greybe, formerly partners in EY’s insurance advisory business, who spent the last decade advising many of South Africa’s largest insurance groups.
The duo said they noticed how many insurers were struggling to transform and stay relevant in light of rapidly evolving customer expectations, while still using outdated business models and systems – so they decided to start from the ground up with Naked, and build a new model entirely.
“Naked Insurance will have absolute customer empowerment and control at the centre of everything it does. The only thing it will retain from the existing insurance model is that its customers are covered. Everything else will be different,” it said.
Hollard CEO, Nic Kohler, will be appointed to Naked Insurance’s board of directors.
“The insurance industry is one of the business sectors that is undoubtedly facing digital disruption. Hollard was built on the belief that there’s always a better way, so we not only embrace the change, but fully support Naked’s intention to bring unprecedented levels of transparency to the insurance environment,” said Heidi Brauer, CMO at Hollard Insurance.
Naked Insurance joins the likes of Pineapple, an insurtech startup based in Johannesburg, which in August, secured seed funding of R5.2 million from Lireas Holdings, the strategic investment arm of Hannover-Re Group Africa, in return for a minority shareholding.
Formerly Amyti, Pineapple claims to be South Africa’s first peer-to-peer insurer and the world’s first fully-functioning decentralised insurer.
It said that the funding will assist the company in bringing its insurance offering to market.
Pineapple said it aims to change the way insurance is done, starting with the mechanics of the actual business model.
It said that today’s insurance companies only provide R36 value for every R100 premium paid, due to excessive expense lines, unfair profiting and an abundance of fraud.
The group said it wants to remove the conflict of interest in insurance by returning all unused premium back to the hands of the consumer.