South Africa is a country of contradictions. Topless bathing is illegal for women on public beaches. Inland, topless maidens dance before their kings. However, the insurance industry is under wraps according to one disruptive firm. What part of its anatomy does Naked Insurance want to expose to all?

I Want to Expose Excessive Profiteering, Says Alex

Naked Insurance’s co-disruptor Alex Thompson says, “Insurance companies are incentivized to minimize the cost of claims to maximize profit. This compromises claims handling and the fairness of premiums,” and he wants to get it out in the open. Judging by the photo, something is out of balance in terms of wealth in Sandton, Johannesburg established 1969.

Alex Thompson’s beef is about underwriting profits, which he says “cause the conflict of interest inherent in insurance firms”. Unsurprisingly, his cheeky insuretech benefits from underwriting by Hollard, one of South Africa’s largest and most successful insurance conglomerates.

It Could Be Cold Out There for Naked Though

Alex Thompson plans "to collect a fixed 20% of premium income to cover costs, while money left over after paying claims, known as underwriting profit would be donated to charity,” according to local media house Business Day

However, South African short-term insurers apparently spend 30% of their net written premiums on “management expenses and commission”. Warren Buffet has previously warned about having cover for lean times. “Only when the tide goes out do you discover who's been swimming naked,” he warns.

Naked Insurance plans to keep warm by using automation, Thompson says. Business Day believes, “Artificial intelligence-based fraud algorithms will permit instant approval of certain claims, while photos, videos and chat-bots will take care of underwriting and claims.”

We Are Open for Competition at Bonzah CEO

Naked Insurance’s first offering will be car insurance, a lucrative business given the proliferation of potholes on the nation’s roads. Home and content will come later, but for now Bonzas’s CEO Steve Sherlock is unfazed. “We have the most affordable, most comprehensive car rental damage insurance anywhere,” he says.

“Where else could you possibly get up to $35,000 coverage for $7.99 a day? Who else has the efficiency to match our package that includes rental car damage, baggage and personal items, zero deductibles, ten day free look, and all eligible drivers covered, built into the price?”

Example Image: Insurance Company Headquarters, Sandton: Andrew Moore BY CC 2.0