Naked Insurance, a Hollard-backed start-up, has become SA’s first operative insurer to relinquish underwriting profits through a business model that co-founder Alex Thomson says solves the "conflict of interest" inherent in insurance firms. Naked Insurance is one of a string of "insurtechs", the name given to insurance-related financial technology (fintech) companies hoping to disrupt SA’s insurance industry — in many cases funded by their traditional counterparts. Speaking on Tuesday at the launch of Naked Insurance, underwritten by Hollard, Thomson, an actuary and former partner in EY’s insurance advisory business. said insurance companies were incentivised to minimise the cost of claims to maximise profit. This compromised claims handling and the fairness of premiums. Naked Insurance would instead collect a fixed 20% of premium income to cover its costs, while money left over after paying claims, known as underwriting profit, would be donated to charity. It may struggle to contai...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.