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The startup, which is based in Johannesburg, made the announcement yesterday to Ventureburn. The funding will help the company to bring their innovative insurance offering to market by funding marketing, development and staff costs.
Pineapple co-founder and former actuarial science graduate Matthew Elan Smith, 24 (pictured above right, with co-founders developer Ndabenhle Junior Ngulube, 26 and accountant Marnus van Heerden, 26) said he and his fellow co-founders are in the process of signing term-sheets.
Johannesburg’s Pineapple claims to have scored a world’s first in achieving a flexible, scalable and decentralised peer-to-peer insurer
The funding came about after the three were last year selected to take part in a global challenge hosted by insurance company Hanover-Re in Johannesburg, Boston, Berlin and Dublin. The three being selected to present and refine their idea in Berlin in July and December last year.
The three claim to have scored a world’s first in achieving a flexible, scalable and decentralised peer-to-peer insurer that provides fully fledged insurance coverage to its members. The company expects to launch the new platform and app — which is aimed at the short-term insurance market — in the last quarter of this year.
Smith said while there are a number of peer-to-peer insurance providers in the market currently, Pineapple — which is underwritten by Johannesburg based underwriters Compass Insurance — offers a more effective model for users.
The platform will compete with existing short-term insurance offered by the likes of local insurance companies such as MyWay, Outsurance and Santam.
While Smith did not want to reveal too much on how the model works he was able to confirm that the platform allows users to pay and track their premiums online, while incentivising users to choose who in their network they want to pool their premiums with.
“We allow users to see exactly what’s going on with their premium and how much is left over,” added Smith.
He said once any payments to settle claims in their network are factored in and Pineapple fees are taken into account, members can also get paid out on whatever amount from their premium that remains unused and would ordinarily have been accrued to the insurance provider as profit.
As users will be incentivised to reduce unnecessary claims (to increase the amount they get in reimbursements), encouraging users to choose who they want to include in their network also acts as a way to cut down on fraud — which he estimated accounted for over a third of short-term insurance claims are fraudulent.
Smith said the Pineapple team currently consists just of the three founders, but that the three expect to make new hires soon.
Featured image: Pineapple co-founders (from left to right) Ndabenhle Junior Ngulube, Marnus van Heerden and Matthew Elan Smith (Supplied)