Johannesburg, South Africa, February 15, 2023— To help increase access to quality insurance products and services in South Africa, IFC, the German Development Finance Institution (DEG), Hollard, and Yellowwoods today jointly announced an investment in South African insurtech company Naked to expand access to vehicle, home, and other insurance products.
The combined, IFC-led $17 million equity 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.
Hollard is South Africa's largest privately-owned insurance group. Yellowwoods is a private investment group with interests in insurance ventures around the world.
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.
"We are excited to bring new investors on board in this funding round, as part of accelerating our growth plans," said Alex Thomson, co-founder of Naked. "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."
"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"
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.
"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 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."
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About DEG
DEG offers financing, advice and support to private sector enterprises operating in developing and emerging-market countries. As an experienced partner, they support customers with in-depth market knowledge, impact and climate expertise and an international network to advance forward looking investments.
Social media links:
DEG (@deginvest) • Instagram-Fotos und -Videos
About Naked
Naked is South Africa's first fully digital insurance platform offering comprehensive and instant cover for cars, homes, contents, and standalone items. Naked uses Artificial Intelligence (AI) and automation to create a new type of insurance experience. Built from scratch and free from legacy processes and systems, Naked is pioneering a business model that aims to restore trust in how insurance works. Consumers benefit from lower costs as well as more control of their insurance experience. They can get a final insurance quote in less than 90 seconds, and switch or pause their cover, all online, without speaking to a contact centre agent.
Naked Financial Technology (Pty) Ltd is an authorized financial services provider (FSP 48822). Policies are underwritten by The Hollard Insurance Company Limited, a licensed insurer and authorized financial services provider. For more information on Naked and its award-winning app, visit www.naked.insure.
Social media links:
https://www.facebook.com/NakedCoverSA
https://twitter.com/NakedCover_SA
https://www.linkedin.com/company/naked-sa/
https://www.instagram.com/nakedcover_sa/
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