Naked, an AI-powered vehicle insurance provider, established its operations in South Africa back in April after first fundraising money from Hollard, the biggest privately-owned insurance group in South Africa, and Yellowwoods, a private investment company back in October 2017.
After Naked met some crucial milestones, the two companies recently invested an extra ZAR30 million or an equivalent of US$2.2 million in the startup to allow the company to not only expedite its growth but also expand into other product lines.
“We are proud to receive this vote in confidence from our investors and look forward to rolling out new products in response to customer demand,” said Naked co-founder Alex Thomson.
SEE MORE: 10 Applications of Machine Learning in Finance
SEE MORE: First Canadian Life Insurer to Underwrite Using Artificial Intelligence
Naked is now planning to increase its team, boost customer acquisition efforts and expand into novel short-term insurance product selections after experiencing a successful first six months of trading, especially with customer retention and acquisition rates surpassing the expectations of the company.
“We’re delighted by the response our insurance offering has received from the market. Our proposition of putting the customer in control, value for money and customer fairness is resonating with connected customers who are looking for a better car insurance experience,” said Thomson.
Naked uses artificial intelligence (AI) and automation to put customers in control of their insurance experience, minimize costs, improve insurance as a social good and reduce fraud.
Currently, clients can easily get a final vehicle insurance quote online without spending more than 90 seconds or even interacting with a contact center agent.
“We are proud investors in Naked because we embrace innovation that delivers an improved customer experience and enhances fairness for policyholders. Its strong performance over the past six months validates its business model, giving us confidence in its ability to drive further growth and innovation in the months to come,” said Nic Kohler, head of insurance at Yellowwoods.
Naked uses a specified portion of its premiums from customers in running its operations, while the remaining amount is channeled into a pool in a bid to cover any arising claims.
Furthermore, the company ’s income is not dependent on whether claims are paid out or not.
MORE: RPA – 10 Powerful Examples in Enterprise
MORE: Top 25 AI Software for the Banking Industry
This particular business model helps in resolving the existing conflict of interest witnessed in traditional insurance: that when insurance companies pay fewer claims, they end up with more profit margins.
The funds that remain in the claims pool all go to charities that have been nominated by clients as opposed to being considered as company profits.
Naked has an application that features various functionalities like Naked CoverPause, which allows clients to pause their accident cover in cases whereby the vehicle will not be in use for at least a day.
By doing so, the company allows customers to minimize the premium to be paid during that duration.
What ’s more, the artificial intelligence(AI)-driven vehicle insurance provider claimed that it also leverages artificial intelligence in not only paying valid claims fast but also repudiating invalid or even fraudulent claims in an effort of benefiting its clients or policyholders.
