Three actuaries that revolutionised insurance in South Africa

Three actuaries, Alex Thomson, Sumarie Greybe and Ernest North, transformed South Africa’s insurance industry by using technology and AI – despite never having sold an insurance policy. 

A few years ago, getting insurance online was completely unheard of in South Africa, but this is the very basis of what would one day become Naked Insurance.

Thomson, Greybe and North started off with a background in the insurance industry, working mostly as consulting actuaries, which gave them “great access” to most of the industry, Thomson told TechCentral.

The three actuaries noticed some common themes working with a lot of the leading insurance players in South Africa and around the world.

Firstly, insurers were struggling to remain relevant, particularly to younger consumers, because they were not using technology effectively. 

These companies were using out-of-date tech that made it very difficult for customers to have a smooth online experience.

This saw clients stuck in long queues, making endless phone calls, and experiencing a very difficult process to get even a simple quote. 

“We saw a lot of opportunity in that space,” Thomson said. 

They also noticed that the relationship between customers and insurers was generally very poor.

“I think we just saw that there was a lot of things changing,” he said.

In addition, social media’s increasing popularity, technological developments, and the rise of fintech companies in South Africa and globally were also starting to shift the market and the ways companies operate.

“We saw that there was going to be a big shift in the insurance sector,” he explained. And these changes were exactly what led to Naked Insurance. 

They realised that the real opportunity wasn’t simply to change the way that insurance was distributed by offering it through an app, for example. It was to re-engineer the entire value chain of how insurance is delivered. 

This included using data better, using automation to allow customers to self-serve more, and improving the speed and convenience of their offering. 

To achieve this, they wanted their systems to be able to do much of the work that would typically have fallen to brokers or call centre agents.

“We saw artificial intelligence (AI) and machine learning as being really critical to the companies that would ultimately succeed in the insurance game in the long term,” Thomson told TechCentral. 

Starting completely from scratch, they built technology to deliver customers a super quick, easy, and even fun insurance experience.

For example, someone can get a final quote from Naked by simply answering a handful of questions on their website, which they can then instantly purchase. 

“So, really, you can be covered in about three minutes flat,” Thomson said.

He explained that this automation also means there are no costs involved for this process, which allows Naked to offer competitive pricing. 

While many South African businesses floundered during the Covid-19 pandemic, this event accelerated Naked’s growth.

Many consumers were previously averse to the idea of getting insurance online, but the pandemic shoved South Africa into the digital world and forced people to become more comfortable with the eCommerce space – and Naked was in the perfect position to benefit. 

The start-up was also pushed forward by an impressive $17 million (at the time, R306 million) series-B funding round from the International Finance Corporation and German development finance house DEG in 2023. 

Naked described this as “one of the largest-ever African InsurTech funding rounds”. 

As the company started gaining momentum, marketing and scaling became increasingly important. 

Today, many people may know Naked best for its marketing campaigns and attention-grabbing billboards, which feature phrases like “get naked on your roof” or “Thato got naked in the casino”. 

“In the beginning, we barely did any marketing. Most of that was word of mouth,” Greybe said on The African CEO. 

The company also attracted new clients through a referral program that rewards individuals for making referrals, which paid out approximately R2.5 million as of April last year.

“It’s very, very important for us to do product-led marketing,” Greybe added. “Our product must be really good so that people will tell other people. That’s still our main strategy.” 

Naked hopes to continue growing in the future, moving out of the short-term insurance space and expanding beyond South Africa. 

“I want to continue growing the business, but in a way that continues to allow us to add value, to create a good work environment for the people that’s working for us, and actually get a good product into the market,” she said. 

“There’s lots of stuff we can still do. We’re super excited about some of the stuff we’re going to do.”