Naked raises R700 million — and plans to crush claim waiting times with AI

Naked Insurance has secured $38 million (R700 million) in its latest funding round, which will help fuel the tech-driven short-term insurers’ artificial intelligence (AI), product, and market expansion.
Naked said the Series B2 funding round represented the largest insurtech investment in Africa.
It follows the Series B funding raise announcements of $11 million (R160 million) in June 2024 and $17 million (R290 million) in February 2023.
The latest funding round saw Swiss-based BlueOrchard join Naked’s existing backers, including Hollard, Yellowwoods, the International Financial Corporation, and Germany’s development finance institution.
Launched in 2018, Naked offers a fully online service for car, moveable items, home, and home contents insurance, including quote generation and customer onboarding, policy management, and insurance claim submissions.
Artificial intelligence (AI) software and automation are cornerstones of the insurer’s operation, helping to minimise human intervention in the onboarding and claims processes.
In addition to its strong tech focus, Naked’s business model differs from conventional insurers. It takes a fixed percentage of premiums and donates any surpluses from unclaimed funds to customers’ chosen causes.
Naked argues this structure eliminated conflicts of interest in claims processing and fostered trust by ensuring valid claims are handled fairly and promptly.
Naked co-founder Alex Thomson said the R700-million investment was a strong vote of confidence in Naked’s successful business model and highlighted its progress in making insurance more accessible and convenient.
“Building off the base of a loyal community and unique technology platform, we are positioned for strong growth in the years ahead,” Thomson said.
“We’re deeply grateful to South African consumers for embracing this new generation of insurance and to our investors for their trust in our vision.”
In addition to extending Naked’s reach and developing new products, the funding will help Naked provide the regulatory capital needed to act as a buffer to enable paying claims in extreme loss scenarios.

Expanding claim automation
Speaking to MyBroadband on the announcement, Thomson said Naked was very pleased with the business’s growth and improvements in economics.
He highlighted one of the areas that Naked was focusing on in the near future was improving automation in claims.
While the insurer’s system already serves automated quoting and onboarding, only a small percentage of Naked’s claims were processed automatically in cases where there was a high level of confidence that a claim was legitimate.
Thomson explained that Naked would continue improving its technology to see how close it could come to fully-automated processes for most claims.
“That is a particular area of focus for us — trying to drive far more full automation — both from a customer experience perspective and the overall relationship with the brand,” Thomson said.
“If you could submit a claim and have money in your bank like five minutes later — that kind of thing is so differentiated and would be so cool. If we could do that on a high percentage of claims, that would be awesome.”
Since the insurer started using its own AI-powered system for claims adjudication, claim turnaround times have decreased by 30% and processing costs by about 25%.
Thomson said Naked was incrementally putting together all the various enablement pieces for more widespread automation in claims.
“I don’t think we will ever see a point where things are completely automated on the claims side but we want to how close we can get to it,” Thomson said.
He also told MyBroadband that Naked’s use of AI and machine learning had aided its fight against insurance fraud, a major problem for the industry.
“There is a lot that technology and data can do to identify these incidents,” Thomson said.
Thomson said the additional benefit of relying more on technology in many aspects of Naked’s operations was significant cost reduction.
These could be passed onto customers through lower premiums, making insurance more accessible for South Africans.