The German online bank N26 has started an insurance service.
LONDON – The German digital bank N26 is taking out insurance.
The Berlin-based fintech announced on Thursday that it is taking out insurance policies for smartphones in cooperation with the local start-up Simplesurance.
Plans start at 6 euros – approximately $ 7.18 – per month based on the original value of the customer’s phone. Users can buy coverage, manage their plans, and file claims for things like water damage and theft.
“When it comes to insurance, customers today still have to deal with complex and outdated processes and paperwork,” said Valentin Stalf, Co-CEO and founder of N26.
“The room has long been ripe for disruption and we are now offering a one-stop digital solution for our customers’ insurance needs.”
The function will initially only be available in Germany. However, N26, which last had a private value of $ 3.5 billion, plans to roll out the product in more countries in Europe and expand it to other types of insurance such as home, life and travel.
N26 was founded in 2013 and is one of the largest so-called “neobanks” in Europe. This term refers to the wave of new banking players trying to disrupt incumbents with app-only checking accounts. Competitors include Chime, Revolut and Monzo.
Although N26 has already paid for subscription accounts that bundle travel and smartphone insurance, this is the first time the company has offered such a product to all users and is challenging established providers like Allianz and Axa.
It can provide a new way for the losing business to generate revenue from its users. N26 says that every customer referred to their insurance partners will make a small cut. Last year the company lost 110 million euros, after a loss of 165 million euros in 2019.
Maximilian Tayenthal, who co-heads N26 alongside Stalf, announced to CNBC in January that the company intends to make its first acquisition to add new potential services such as investments to its offering.
N26’s entry into the insurance market comes as investors pump hundreds of millions of dollars into digital insurance startups. UK online insurer Zego recently raised $ 150 million at a $ 1.1 billion valuation, while German counterpart Wefox reportedly raised $ 250 million at a $ 2 billion valuation aspires to.