Naspers led an $11m investment in Naked, an InsurTech company offering a digital way for consumers to insure their cars, homes, and valuables.
Existing investors, Yellowwoods and Hollard, also participated in the funding round. Naspers invested $8.3m as the lead investor — the largest the Naspers investment vehicle has made so far, through its early-stage tech investment vehicle Naspers Foundry. This funding comes barely two weeks after Naspers Foundry, invested in another South African InsurTech platform Ctrl in its $2.3m Series B round.
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.
Consumers benefit from lower costs as well as more control of – and convenience in – their insurance experience, it said. 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 centre agent.
Thomson commented, “Our ambition is to build insurance that people love by offering an experience that is affordable, convenient and transparent. We have come a long way since our launch in 2018 towards meeting these goals, including enabling customers to buy cover online in seconds, allowing them to claim and manage cover on our award-winning app, and passing on huge savings through sustainably lower premiums.
“But this is just the start of our journey to reinvent insurance. We are excited to have an investor of Naspers Foundry’s calibre onboard to work with us as we expand our team, continue to invest in the technology that puts customers in control, meet the insurance needs of a growing portion of the SA market and enter into international markets.”
Africa’s insurance sector is worth over $68bn in annual gross written premiums. South Africa makes up 70% of this market, with an annual gross written premiums market of over $47bn. 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%.
Naspers CEO Phuthi Mahanyele-Dabengwa said, “South Africans are in general underinsured when it comes to short-term personal insurance. While this is often due to price, consumer distrust and complexity have led to a misunderstanding of insurance.
“Naked’s offering is convenient, transparent and passes the cost savings from its innovative technology on to customers. It improves financial inclusion in line with Naspers Foundry’s objective of investing in technology businesses that have a positive impact on society.”
Echoing a similar sentiment, Naspers Foundry head Fabian Whate added, “We’re excited to support Naked in their journey of pioneering a new generation of insurance, giving consumers access to convenience, control and savings with its end-to-end digital processes.
“This fits in with our focus of backing purpose-driven technology businesses. Investing in Naked is consistent with the portfolio we’ve built to date and Naspers Foundry’s healthy pipeline of potential future investments.”
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