South African InsurTech startup Naked Insurance raises $1.4 million
Naked Insurance, a South African InsurTech startup founded by two former partners at EY, has raised a R20 million ($1.4 million) funding round, as it aims at accelerating its growth in the country and the region as a whole.
Actuaries Alex Thompson and Sumarie Greybe spent ten years as Partners at Big Four professional services firm EY advising high-profile insurance groups across South Africa. During their time in the practice, the duo noticed that customer expectations, particularly in the insurance industry, were constantly expanding and evolving in tandem with rapid advancements in market trends and technology. As a result, most insurance providers are caught in a constant struggle to deal with these expectations, most of which attempt to do so using old and irrelevant business models and technologies.
The pair has decided to bridge these gaps through technology, using the medium of their new InsurTech startup called Naked. The firm, which is due to officially enter the market in the first quarter of 2018, will work on using technology to improve key processes in the insurance industry, with the aim of improving their speed, fairness, and adaptability. In essence, the firm hopes to devise a new, radically different model for insurance providers, although the exact details of the plan are yet to be disclosed.
“Our work revealed the many very real reasons a typical insurer can’t deliver insurance that’s appropriate for the times we’re in. The only way to do things differently was to get out of the system, start from scratch, and build a business model and technology to deliver a new generation of insurance. It is time for insurance to adapt to current times, technology, and social standards, and offer the kind of transparency and trust that consumers expect from a financial services provider,” said Thompson, who has over 15 years of experience as an actuary.
Having completed a Bachelors in Actuarial Science from the University of Cape Town, Thompson went on to join the Institute of Actuaries. He began his career at Swiss Re Life &Health in South Africa, joining as an analyst and graduating to Capital Management Model Actuary. He then spent ten years at South African actuarial consulting firm Quindiem Consulting, where he ended up as Joint Managing Director.
Eventually, Thompson joined EY, where he spent five years as Partner and Head of Africa Actuarial Services. His career path is strikingly similar to co-founder of Naked Sumarie Greybe. Having completed a Bcom with Honours in Actuarial Sciences from the University of Pretoria, Greybe also began her career at Swiss Re before becoming a Founding Partner at Quindiem Consulting, and eventually becoming a Partner at EY and Head of EY Africa’s Africa Actuarial Services Short Term Insurance Practice*.
R20 million funding round
Having co-founded Naked last year, the duo has recently received a major boost for their business in the form of a R20 million ($1.4 million) funding round from companies Hollard and Yellowwoods. Hollard is South Africa’s largest privately owned insurance group, while Yellowwoods is a private-investment group that targets insurance ventures across the world, including Hollard.
Commenting on the investment, Heidi Bauer, CMO at Hollard Insurance said, “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.”
* In July 2011, EY acquired Quindiem Consulting, with Thompson and Greybe transferring as part of the deal.
