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South African insurtech startup Naked Insurance has raised a ZAR20 million (US$1.4 million) funding round as it looks to make the business of obtaining insurance effortless, fair and more transparent.

The funding comes from Hollard, South Africa’s largest privately-owned insurance group, and private investment firm Yellowwoods, with Naked Insurance set to launch into the market early next year.

The startup’s aim is to use technology to transform the insurance business model to give customers a faster, fairer and more flexible insurance experience. It is led by actuaries Alex Thomson and Sumarié Greybe, formerly partners in EY’s insurance advisory business.

The pair spent the last decade advising many of South Africa’s largest insurance groups, and noticed how these groups were struggling to transform and stay relevant in light of rapidly evolving customer expectations while still using outdated business models and systems.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,” said 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.”

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