Fintech: German Challenger Bank N26 Wants To Move Insurers’ Cheese
N26 just got its foot in the door – it has launched insurance policies for smartphones.
Berlin-based neobank N26 announced today its offering of smartphone insurance in collaboration with Simplesurance. Offered for the time being only in Germany, the product allows users to buy insurance, initiate claims and manage plans for their smartphones. (CNBC)
N26 has bigger plans for its insurance business, however. In course of time, it intends to offer insurance for homes, life, and travel too, and across more countries in Europe. It could also cover private liability, bikes, electronics, and pets. All this, from inside its app.
After challenging traditional banks, N26 is now taking a shot at stodgy, paper-laden insurers.
Insurers: Ripe for disruption
Valentin Stalf, co-CEO at N26, says: “When it comes to insurance, customers today still have to contend with complex and outdated processes and paperwork. The space has long been ripe for disruption and we are now offering a one-stop digital solution for our customers’ insurance needs.”
By allowing its users to buy insurance through its app, N26 can earn a referral fee from its insurance partner. This would be a new revenue stream for the bank, which is currently in the red. In 2020, the firm lost €110 million, slightly down from a €165 million loss in 2019.
However, growth is no issue its seems. By the end of 2020, monthly transaction volumes at the online bank had hit an all-time high of €5.5 billion. In January, N26 welcomed its 7 millionth customer.
With this move into insurance, N26 is facing off with giant insurers such as Allianz (ETR: ELV) and Axa (EPA: CS).
On the flip side, investors are backing to the hilt digital insurance upstarts such as Zego and Wefox. These new entrants might like to partner with a digital challenger bank such as N26 for marketing benefits.
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