Naked to boost access to insurance in South Africa

$17 million investment will help Naked provide insurance access to more first-time insurance buyers.

$17 million investment will help Naked provide insurance access to more first-time insurance buyers.

Published Feb 17, 2023


All their products are underwritten by Hollard, South Africa’s largest privately-owned insurance group.

To help increase access to insurance products and services in South Africa, International Finance Corporation (IFC), the German Development Finance Institution (GED), Hollard, and Yellowwoods announced this week an investment in the insurtech company to expand access to vehicle, home, and other insurance products.

The combined $17 million (about R305 million) equity investment will support Naked’s strategy to expand its digital insurance offering, including to more first-time insurance buyers, according to a public statement, and allow it to continue innovating to improve customer experience.

IFC is a member of the World Bank and is the largest global development institution focused on the private sector in emerging markets, while Yellowwoods is a private investment group with interests in financial services and hospitality around the world.

Both the IFC and DEG stated that they are backing Naked in line with their goals of investing in companies that can make a social impact, increase competition in financial services in Africa, and foster financial inclusion.

“The funding round signals strong investor confidence in Naked’s management, technology and positioning, as well as in the significant opportunity to use AI and digital experiences to grow Africa’s insurance market in the years ahead.”

“Improving access to insurance products is a key driver of financial inclusion as it has the potential to preserve assets, provide protection and risk-sharing, and reduce uncertainties,” said Adamou Labara, IFC Country Manager for South Africa.

“IFC’s investment in Naked will help increase the penetration of tech-driven insurance in the country and support the growth of the insurance sector to enhance economic growth.”

Ingo Schultz, Vice President at DEG Insuretech Global Markets, said, “We believe that Naked is well positioned to drive digital transformation and inclusion in the South African insurance industry because of its unique technology and innovative business model.

“We recognise the enormous commercial potential in increasing access to insurance through the use of smart technology. We’re excited to partner with Naked, not only as the leader in this space, but also as a business that will have a significant positive social and developmental impact.”

Alex Thomson, co-founder of Naked, said, “We are excited to bring new investors on board in this funding round as part of accelerating our growth plans.

“This investment validates our position as a pioneer of fully digital insurance in South Africa and will enable us to grow our team, continue to invest in technology that puts customers in control and to expand into new markets.”

“Since our launch in 2018, we have been overwhelmed by customers’ enthusiasm for our offering and have exceeded our growth targets every year,” he added.

Naked’s AI-driven online sales system allows the company to increase efficiency and convenience, offer lower prices, and serve more customers than more traditional insurance companies.