CAPE TOWN - A new insurance startup, called Naked, offering an AI-based car insurance product, has officially launched in SA.
Last year, the start-up raised R20 million in funding in November from companies Hollard and Yellowwoods.
Naked is co-founded by actuaries Sumarie Greybe, Alex Thomson and Ernest North who for many years worked with South Africa’s leading insurers.
When asked what makes Naked different from other insurers, the founders explained that they only take a flat 20% of all premiums to cover their running costs and hopefully some profit.
"The other 80% is for settling claims. If any of that money is left over, it goes to causes you care about, supporting positive change in South African communities rather than growing insurance company profits.
This means we can’t make more money by paying out less, so we have no reason to make claiming difficult. And there are no hidden agendas. That’s why we’re called Naked", the company said.
The company assures users that it is very simple to use; all you need to do is to receive a quote, and once accepted, receive cover in three minutes on the Naked website or app.
Naked said that their greatest challenge when starting up the business was the current VC (Venture Capital) market in South Africa is very small and they were fortunate to be given the opportunity to build this business.
"We were even more fortunate to be able to gather a group of enthusiastic and very talented local developers to join us on our journey of wiping the slate clean and overhauling the insurance model to deliver on its original purpose in society", said the company.
How does it work?
1. Go to the to the Naked Insurance website and then download the app for iOS or Android.
2. When the app has been downloaded, you can log in and start insuring vehicles.
3. Select the year, make and model of your vehicle
4. You then answer a few questions and recieve a quotation.
By using artificial intelligence, Naked is able to check your identity using databases from existing sources such as eNATIS and databases from Trans Union.
"Naked clients will control their cover on their mobile phone, with limited human interaction - we use automated AI processes rather than large call centres. So the cost of administering insurance is much lower, and that translates directly into much lower premiums for our clients", said Naked.
"AI also allows to automatically validate claims for fraud, and approve some claims instantly, reducing the inconvenience and intrusiveness of claims assessments and speeding up the claims process," said the company.
Customers using Naked are allowed to change their cover at any time.
Clients can also put their accident cover on hold when they aren’t driving the vehicle, this option is called Cover Pause.
For example, if you're traveling and you park your car somewhere for a week; your premium will actually be lower while you aren’t driving your car.
- BUSINESS REPORT ONLINE