Hollard, South Africa's largest privately-owned insurance group, has backed Naked, an insuretech start-up company set to enter the market in the first quarter of 2018.

Naked has received funding through a R20 million investment from Hollard and Yellowwoods, a private investment group with interests in insurance ventures around the world, including Hollard. The start-up aims to transform the insurance business model to give customers a faster, fairer and more flexible insurance experience.

Respected actuaries Alex Thomson and Sumarié Greybe, formerly partners in EY’s insurance advisory business, spent the last decade advising many of South Africa’s largest insurance groups. They noticed how many groups are struggling to transform and stay relevant in light of rapidly evolving customer expectations, while still using outdated business models and systems.

“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,” says Thomson. “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.”

Naked Insurance will have absolute customer empowerment and control at the centre of everything it does. The only thing it will retain from the existing insurance model is that its customers are covered. Everything else will be different.

“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,” says Heidi Brauer, CMO at Hollard Insurance. “Naked’s vision fully resonates with our purpose of enabling more people to create and secure a better future”.

Naked also revealed that it has appointed outgoing Hollard group CEO Nic Kohler to its board of directors. “Considering the Naked team’s years of first-hand experience and their sincere drive to reinvent insurance, I’m confident they will do exactly that,” Kohler says.