NAKED INSURANCE
Naked Financial Technology uses the power of Artificial Intelligence (AI) to give you total control, value for money and the fairest car, home and building insurance – all while making a positive change to society.

Who We Are
At Naked we use a technology platform that we’ve developed from scratch – without linking to any legacy insurance system. This means that we can offer South Africa’s first end-to-end AI- driven car, home and buildings insurance, underwritten by Hollard. This equates to both convenience and speed for our customers, whether it’s buying, managing or claiming on one of our policies.

What We Do Together
Following on from our flagship car insurance product, Naked now offers a range of short-term insurance options in addition to car insurance, including buildings and home contents insurance (plus liability cover). Naked also offers cover for individual items like a laptop or phone, if you don’t want to buy a comprehensive home contents insurance policy. All underwritten by Hollard.

Why Choose Us
As one of the industry’s most forward-thinking short-term insurers in South Africa, here’s why you should use us:
1. Save money. Because we use AI (rather than brokers and call centres) to run and manage
your policy, these cost savings are directly passed on − meaning lower premiums for you.
2. You get full control. Manage your policy on the app. Sign up and manage your policy completely online − and if you need to claim, you could get it approved in seconds, using our chatbot Jade’s help through the Naked mobile app.
3. Unconflicted business model. Unlike conventional insurers, Naked takes a fixed portion of premiums to run the business, with the balance going into a pool to cover claims. At the end of each year, money left over in the claims pool goes to charities nominated by you, the customer. Naked’s annual profit, therefore, doesn’t depend on whether claims are paid or not, plus there are no hidden fees or hidden agendas (that’s why it’s called Naked!). Naked Financial Technology is an authorised FSP, and our product (Naked Insurance) is underwritten by Hollard.

NAKED DOES NOT WORK, THINK OR MAKE MONEY THE WAY TRADISIONAL INSURERS DO.

Often to get something right, our head and heart need to work together.Naked’s revolutionary business model does just that, and in doing so, breaks the age-old cycle of distrust between insurers and their customers. Unlike other insurance, they charge a fixed percentage of your premiums to do everything. No hidden fees or hidden agendas (that’s why we’re called Naked!). Our flat fee means that our income doesn’t depend on how much we pay out in claims, so we have no reason to make claiming difficult. When claims are low, premiums left over at the end of the year go to causes you care about, supporting positive change in South African communities, rather than growing insurance company profits. That’s the Naked Difference and it changes everything about insurance.

INSURANCE CHANGES FOR GOOD: NAKED RASIES R160 MILLION IN FUNDING

Since day one, our mission has been to build insurance that people love. We are still early in our journey and by raising R160 million (US$11m) we are excited that we will be able to accelerate our vision. Our focus will be on expanding our team, continuing to invest in the technology that puts customers in control, meeting the insurance needs of a growing portion of the South African market, and entering into international markets. This funding round was led by Naspers Foundry and we look forward to working with an investor of their calibre. Existing Naked investors, Yellowwoods and Hollard, also participated in the funding round, endorsing our growth plans and success thus far.

Our mission has always been clear: to build instant, honest, affordable insurance that people love.

This might seem like a big, hairy, audacious goal, given the levels of apathy and distrust most people feel towards insurance. Then again, most worthwhile endeavours aren’t easy. We believe it’s imperative to restore people’s confidence that their insurance will do what it says on the tin, and that we are on the right track to doing just that.

How are we doing this?

First, through our technology. We give people total control, from enabling them to buy cover online in seconds, to allowing them to claim and manage their car, home and single item insurance directly on the Naked app. Our technology also never sleeps, meaning this can be done 24/7 and all without chatting to a call centre. These operational savings are then passed on directly to our clients, through sustainably lower premiums.

The second part is the way that we run our business. Inherent in the traditional insurance model is the reality that if less is paid out in claims, it means more profit for the insurer. This results in the client and their insurer being in a constant tug of war over the same money when a claim is submitted. We don’t work like that. Instead, we take a flat fee upfront to cover running costs and profit. The rest of the money goes towards claims, with leftover premiums at the end of the year paid to causes our clients choose, rather than our bottom line – this is the Naked Difference and it changes everything about insurance. This means that our profit isn’t linked to how much we pay in claims. By aligning our interests with those of our clients, we create mutually beneficial relationships amongst Naked, our clients, and our communities.

We’re well on our way to changing insurance for good
When we started Naked, many people believed that our mission was unobtainable and unrealistic. This new round of funding shows how far we’ve come – but we’re just getting started. There’s so much more we’d like to do, and this funding allows us to take things to the next level – building insurance experiences that are simple to use, yet beautiful, while making them available to more and more people. We couldn’t be more excited to walk this journey of redefining insurance with you and are immensely grateful for your ongoing support.

Question 1:

Competitive intelligence may be defined as the process of systematically scanning the business environment and identifying and assessing potential opportunities and threats (Louw & Venter, 2019). Naked wants to improve their market share in South Africa and is considering acquiring Granadilla Insurance (a competitor) to do so. Granadilla Insurance focuses mainly on the gadget and small business insurance compared to Naked, which focuses on car and household insurance.

As a strategic consultant for Naked, you are tasked to advise Naked.

Your answer should contain the following points:
• Provide a brief introduction to strategic decision making and macro -environmental analysis.
• Complete a CI cycle on Naked’s consideration to add small business insurance to their policy options.
• In conjunction with the CI cycle, conduct a macro-environmental analysis (PESTEL analysis) for Naked on the South African market.
• Compare the outcomes of a SWOT analysis for both Naked’s current policy offers (car and household insurance) and the SWOT analysis of a small business insurance policy option respectively.
• Conclude whether it is in the interest of Naked to add small business insurance to their policy options, by acquiring Granadilla Insurance. Provide reasons for your answer.

Question 2:

Strategic decisions are usually made quickly to not lose out on fleeting opportunities in the turbulent business environment. Your report to Naked had to be written under immense time- pressure and as a consultant, you are exposed to several risks. You are required to include in your report a “disclaimer” of sorts, informing Naked of all the constraints and limitation you faced during the writing of your report. You are required to conduct research beyond the scope of the prescribed material to answer this question.

Your answer should contain the following points:
• Declare any/all limitations and disadvantages of the analysis tools used in Question 1 of your report.
• Outline any challenges faced during the writing of the report that may influence the objectivity and validity of the report.

You are required to use a minimum of two additional academic sources, excluding the prescribed textbook, to support your argument/discussion/analysis/evaluation. Wikipedia/Investopedia/ Social Media are not regarded as academic sources.

Answers to Above Questions on Naked Case Study

Answer 1: Strategic decision making is highly important for every type of organisation, and in the given case study on Naked insurance, the role and importance of strategic decision making is significant to the overall success of the organisation. As a part of strategic decision making, it is important to evaluate the metro environment faced by the organisation. In the given case study, the analysis of the economic factors such as GDP growth, inflation rate and consumer spending is important in order to evaluate their impact on the demand for insurance and consumer affordability.