Naked Insurance, a South African insurtech company, raises $38 million in funding to accelerate its AI development, product offerings, and market expansion. The funding will also support the company's efforts to enhance automation in claims processing and combat insurance fraud.
Naked Insurance , a South Africa n insurtech company, has secured $38 million (R700 million) in its latest funding round. This injection of capital will be instrumental in accelerating the company's growth, particularly in the areas of artificial intelligence (AI) development, product expansion, and market penetration. This latest funding round follows previous successful raises in June 2024 ($11 million or R160 million) and February 2023 ($17 million or R290 million).
Notably, Swiss-based BlueOrchard joined Naked's existing investor base, which includes prominent names like Hollard, Yellowwoods, the International Financial Corporation, and Germany's development finance institution.Naked Insurance, established in 2018, offers a fully online insurance experience for a range of products, including car, movable items, home, and home contents insurance. From generating quotes and onboarding new customers to managing policies and submitting insurance claims, the entire process is conducted digitally. At the heart of Naked's operations lies its commitment to artificial intelligence (AI) software and automation, minimizing human intervention in onboarding and claims processes. This technological focus not only streamlines operations but also enhances efficiency and accuracy.Beyond its technological prowess, Naked Insurance distinguishes itself from traditional insurers through its unique business model. It operates on a fixed percentage of premiums, allocating any surpluses from unclaimed funds to causes chosen by its customers. This structure eliminates potential conflicts of interest in claims processing, fostering trust and ensuring fair and prompt handling of valid claims. Alex Thomson, Naked's co-founder, expressed his gratitude for the overwhelming support received from investors, highlighting the significant progress made in democratizing insurance and making it more accessible and convenient. He emphasized that with a loyal customer base and a robust technology platform, Naked is poised for substantial growth in the coming years.In addition to expanding its reach and developing innovative products, the funding will enable Naked to acquire the necessary regulatory capital to serve as a buffer, ensuring its ability to meet claims obligations even in extreme loss scenarios. Alex Thomson shared with MyBroadband that Naked is particularly focused on enhancing automation in claims processing. While the current system already automates quoting and onboarding, only a small percentage of claims are processed automatically. However, Naked aims to progressively improve its technology to achieve near-complete automation for most legitimate claims. This would significantly shorten claim turnaround times and provide a seamless customer experience. He envisions a future where customers could submit a claim and receive payment within minutes, a truly transformative proposition.Naked's AI-powered system has already demonstrated its effectiveness in reducing claim turnaround times by 30% and processing costs by 25%. The company's strategic investment in AI and machine learning has not only optimized internal processes but also played a crucial role in combating insurance fraud, a pervasive challenge within the industry. The widespread adoption of technology across Naked's operations has resulted in substantial cost reductions, which are ultimately passed on to customers through lower premiums, making insurance more affordable and accessible to South Africans
Naked Insurance AI Funding Insurtech South Africa Automation Claims Processing Insurance Fraud
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