German online bank N26 has launched an insurance service.
LONDON — German digital bank N26 is getting into insurance.
The Berlin-based fintech said Thursday that it’s launching insurance policies for smartphones in partnership with local start-up Simplesurance.
Plans start from 6 euros — about $7.18 — a month, based on the original value of the customer’s phone. Users will be able to buy coverage, manage their plans and initiate claims for things like water damage and theft.
“When it comes to insurance, customers today still have to contend with complex and outdated processes and paperwork,” said Valentin Stalf, N26’s co-CEO and founder.
“The space has long been ripe for disruption and we are now offering a one-stop digital solution for our customers insurance needs.”
For now, the feature will only be available in Germany. But N26, which was last privately valued at $3.5 billion, said it plans to roll the product out to more countries in Europe and expand it to include other types of insurance such as home, life and travel.
Founded in 2013, N26 is one of Europe’s biggest so-called “neobanks,” a term referring to the wave of new banking players attempting disrupt incumbents with app-only checking accounts. Its competitors include the likes of Chime, Revolut and Monzo.
Though N26 already has paid subscription accounts which bundle travel and smartphone insurance, this is the first time the company has offered such a product to all its users, and marks a challenge to established providers such as Allianz and Axa.
It may provide the loss-making firm with a new way to generate revenue from its users. N26 says it will take a small cut from each customer that gets referred to its insurance partners. Last year, the firm lost 110 million euros, slightly down from a 165 million euro loss in 2019.
Maximilian Tayenthal, who runs N26 alongside Stalf as its co-CEO, told CNBC in January that the company was thinking of making its first acquisition, in a bid to expand its offering to include new potential services such as investments.
N26’s entry into the insurance market comes as investors are pumping hundreds of millions of dollars into digital insurance start-ups. U.K. online insurer Zego recently raised $150 million at a $1.1 billion valuation, while German counterpart Wefox is reportedly seeking a $250 million investment at a $2 billion valuation.