New InsureTech Companies are Changing the Face of Insurance
Experience a new generation of insurance called “InsureTech” that brings you greater control, better savings, and increased trust between you and the insurance company.
Various endeavours have led to the development of disruptive insurance models in recent years that are changing the way insurance works in South Africa. These models are embodied in new insurance companies, often underwritten by established financial services providers such as Hollard, Old Mutual, and Guardrisk. Below we look at the emerging disruptive insurance models, new InsureTech companies, what led to their development, and how they can benefit you.
What are Disruptive Insurance Models?
Disruptive insurance models are new insurance models developed with the intention of disrupting the traditional insurance industry. These new insurance models aim to bring changes to the way insurance works, how it is perceived, and how it benefits both the company and the insured entity. According to a 2018 Cenfri Report, South Africa is a leading country when it comes to discovering fresh insurance models that are innovated to revolutionise the industry.
With more than 50 InsureTech endeavours in the works, South Africa is leading the way. Of these projects, a few noteworthy efforts have gained massive success. These new companies are bringing consumers a new level of control, trust, and benefit.
Meet the New InsureTech Companies Stirring the Industry
Traditional insurance is not absent or suffering losses due to the new insurance companies surfacing in the country.
Pineapple insurance offers fair, instant insurance for personal items. Established in 2018, Pineapple Insurance has already won 8 awards for their innovative approach.
Where Does the Fresh Pineapple Insurance Model Come From?
A Hannover-Re competition in 2016 aimed at finding disruptive insurance models that change the way insurance works put the founding team together. Coached by the then CEO of Hannover-Re and by the founder of ParrotSA, the seeds that would grow into the Pineapple were birthed.
What is Pineapple’s Fresh Approach?
Pineapple started by putting the end-user at the centre of their thinking, then identified challenges to solve. First, insurance providers and the insured do not trust each other, leading to fraud and further mistrust. Traditional insurance also includes a major conflict of interest, namely that insurance providers benefit by NOT paying out claims. Traditionally, the insured do not get a lot of value out of the deal.
Using a digital application, anyone can purchase immediate insurance for their possessions, as in physical assets you can hold (for example a phone, computer, camera, or furniture item). The pineapple app allows you to take a photo of the item, get the costing for insuring the item through AI, and switch the insurance on with a button. Premiums go into your Pineapple wallet. A small fee from this wallet insures your claims always get paid even if your wallet is emptied.
Whenever anybody claims back, the claim can affect your wallet. On the plus side, the insurance company does not benefit from not paying out claims. Claims are paid out much faster, and customers do not need to fill in a list of forms or speak to consultants and representatives on the phone. At the end of the year, whatever remains in your wallet is yours to either reuse for insurance or withdraw for spending.
Naked Insurance is underwritten by insurance giant Hollard. Offering car and home insurance, this newbie focuses on solving the previously identified weaknesses in traditional insurance in their own creative way.
What is Naked’s New Insurance Approach?
By using an app and artificial intelligence to purchase and manage insurance policies, Naked is able to cut out call centres and brokers, making their premiums lower. The convenience is unparalleled, with no forms or complicated procedures. Naked gets a fixed 20% of premiums, and the rest goes towards paying claims. Whatever is left at the end of the year will be donated to the charity of your choice.
This model relies on open, naked honesty from the insurance company and the insured person. The system also includes a communal approach to insurance, with all premiums going into one pool from which claims are paid. A digital chatbot named Rose guides users through the whole experience.
Naked Insurance Cover Pause
With Naked’s car insurance policies, customers can choose their excess. An innovative product called CoverPause also allows users to pause their cover, paying up to 90% less for insurance when their car isn’t on the road. The car will then be insured only for risks relating to a stationary vehicle, making it possible for Naked to offer a drastically lower premium.
As with Pineapple Insurance, Naked allows users to switch on or off their insurance at absolutely any time. Premiums are paid monthly in advance, though, so switching it off and on many times in a month won’t make sense.
Funded by Santam, JaSure offers similar benefits in their disruptive insurance model. Use of an app and AI make getting cover and managing your insurance easier. JaSure offers insurance cover for personal movable items. Aiming to reduce complexity and cut costs, JaSure leaves control in the hands of the insured. You can claim with a video and switch your insurance on or off whenever you want.
Can New South African Insurance Companies Save Me Money?
In short? Yes, you could absolutely save money by paying less thanks to money-saving strategies implemented by the company, and by the increased likelihood of claims being paid, seeing that there is no reward for the insurance company if your claim isn’t paid out. That said, it’s always a good idea to read the fine print and request viewing the policy documents before signing up.
Other Noteworthy InsureTech Companies
Nobuntu, underwritten by Guardrisk, offers innovative funeral insurance for employees and a life savings initiative called the People’s Fund.
Investsure, underwritten by Compass Sure, offers insurance that covers investments.
Yalu, underwritten by Old Mutual, offers customers innovative credit life insurance.
DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.
Sources: ventureburn; pineapple; naked; Disrupt-Africa;