Naked grows its user base by 20% a month since its launch one year ago


Naked, the artificial intelligence-driven car insurance provider, has grown its user base by an average of 20% a month since its launch one year ago and is now looking to expand into new short-term insurance product categories, growing its car insurance customer base, and continuing to expand its team. 

Naked’s offering has gained traction with tech-savvy young adults who want to be able to do everything online — more than 80% of customers are aged under 40. Its typical customer is a digital native who wants a quick and convenient digital experience, from getting a quote to signing up, to managing their policy and claiming. 

The power of word-of-mouth means Naked has lower advertising and customer acquisition costs than most insurance companies, enabling it to pass its cost savings on to customers in the form of lower premiums. Use of digital channels rather than call centres also helps the company to keep operating costs – and hence premiums – low.

In terms of profitability, Naked has paid numerous claims over the past year, meeting its target of using 80% of premium income to pay claims. This compares favourably to the loss ratios of most international car insurance and insurtech startups in their early years. The ratio is expected to improve as Naked’s algorithms for fraud detection become ever more sophisticated.

Unlike traditional insurers, Naked takes a fixed portion of premiums to run the business, with the balance going into a pool to cover claims. Money left over in the claims pool goes to charities nominated by customers rather than towards company profits. Naked will be making the first such Naked Givebacks in the new financial year.

Alex Thomson, co-founder at Naked