Naked Insurance, South Africa’s leading independent insurance provider, has been voted the MTN Best Company for the seventh consecutive year. In the past, the company has continued to strive to maintain the high standards that are synonymous with an insurance offering, while also constantly looking out for new opportunities to increase its market share. The company currently enjoys over 25 years of experience in the industry and was named by the World Insurance Council as one of South Africa’s Leading Insurance Providers for the Third and Fourth Period.
Naked Insurance, South Africa’s number one insurance brand, has enjoyed tremendous success since its launch in the late 1990s. Today, it is the top company for automobile insurance in South Africa, with a market share that is well above the competition. Currently, Covercraft, the country’s leading independent car insurance provider, is fighting hard to keep itself afloat against Naked Insurance. Over the last three years, Covercraft has made aggressive changes to its business model, resulting in poor customer service, an increased number of complaints, and ultimately, the refusal of several insurance policies by existing customers.
A primary objective of Naked Insurance is to provide its customers with the lowest possible premium rates. Claims submitted by customers indicate that their policy offers are competitive with other insurance providers, but Naked Insurance needs to maintain its low premiums in light of its competitors’ increasing premium rates. Currently, most of the insurance industry is based on the premise that the claim ratio is key to assessing an insurer’s health. The ratio is defined as the number of claims filed, as opposed to the number of insurance policy claims paid out in a year.
Although most companies in the insurance industry offer competitive premiums, they differ greatly in terms of service. Premiums also vary by geographical location, age and gender. In South Africa, premiums are based on the individual risk profile of an individual driver. However, the recent past has seen several insurance companies move into the city, and consequently, premiums have risen considerably. Drivers in South Africa often complain that in addition to high premiums, they are often not provided with sufficient assistance when making a claim. This can be particularly problematic during claims made during the winter months when drivers struggle to make claims due to the high levels of snow that the city sees during this time of year.
In addition to providing competitive premiums, many short-term insurers operate in the country’s second-tier cities, which are often the least affordable way of getting coverage. In addition to providing the cheapest premiums available, short-term insurers often take a long time to settle claims, resulting in a loss of revenue for the company in the long term. Furthermore, some short-term insurers refuse to pay out if their client has reached the maximum limit of expenditure set out by the insurer under the policy. An example of this could be where a policyholder buys a vehicle and then overspends on expensive extras such as an extended warranty or extended car rental.
These issues detract from the attractiveness of naked insurance, however. Given that the majority of companies have little to no customer service experience, it is rarely possible to fully assess how the insurer will handle a particular claim. With a few exceptions, short-term insurance is often designed to provide quick access to cover at an affordable price. For businesses that do not require immediate claims to be paid, the benefits provided by this business model are limited.