By Adedapo Adesanya
The International Finance Corporation (IFC) has led a $17 million investment into South African insurtech firm, Naked, to expand access to vehicle, home, and other insurance products.
The World Bank member, alongside the German Development Finance Institution (DEG), South Africa’s largest privately-owned insurance group, Hollard, and a private investment group with interests in insurance ventures around the world, Yellowwoods, jointly announced the investment, which it aims would help increase access to quality insurance products and services in South Africa, one of the largest economies on the continent.
The investment will support Naked’s strategy to expand its digital insurance offering, including to more first-time insurance buyers, and allow it to continue innovating to improve customer experience.
South Africa has the largest and most mature insurance market in Africa. However, the most widely sold insurance products in the country are life and funeral insurance. Naked is increasing access to other insurance products, removing the need for costly distribution or sales channels, and passing a significant portion of the savings on to consumers through lower premiums.
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.
Speaking on the round, Mr 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 expand into new markets.”
“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 Mr 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.”
“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,” said Mr Ingo Schultz, Vice President at DEG Insuretech Global Markets.
“We recognize 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,” he added.
