Four times oversubscribed this funding round!
Another interesting take is that Wefox has a different strategy than many insurers.
"But what makes Wefox different from legacy insurance companies? Wefox isn’t a direct-to-consumer insurance company. Most insurance products are still sold by agents and the start-up believes this isn’t going to change anytime soon.
That’s why Wefox has 700 agents selling Wefox products exclusively. It also partners with associate brokers — around 5,000 can distribute Wefox products.
“While the rest of the industry seems to say that human agents are dead, we think they’re more relevant than ever,” Teicke said."
Romaine Dillet TechCrunch June 1 2021
In 2020 alone, the company generated $140 million in revenue. If you look at Wefox Insurance, the company’s insurance carrier, the company reported a profit for 2020. As for the group, “we’re going to show overall profitability by 2023,” Wesemann said.
That fast growth rate combined with a clear path to profitability means that Wefox has an ambitious roadmap. As a full-stack insurance company licensed in Lichtenstein, Wefox can passport its license to other European countries. The company is currently live in five markets right now and is working on expanding to Italy soon.
In addition to new markets, Wefox plans to sell new insurance products — property and casualty insurance, pet insurance, health insurance, life insurance… If you’re thinking about an insurance product, chances are Wefox is already working on it. “This year we’re launching around 20 new insurance products,” Teicke said.
That is a challenge to incumbent insurers. One measure of innovation is the number of new products launched and the proportion of revenues these new products represent. You feel that Wefox will achieve far higher ratios than incumbents. Whilst it can be argued that an insurtech unencumbered by legacy technologies and culture will find it far easier that is in fact the whole point.
At the same time two other insurtechs make big splashes in the funding oceans.
Bought by Many raises $350m for a $2bn valuation as pet ownership soured during the lockdown.
wejo goes the SPAC route and is valued at $1.1bn. with its focus on the connected car.
You get the feeling that we have reached an inflection point as various changes interact to increase the momentum of change. In the UK insurance market as the FCA makes insurers stop price walking-the practise of penalising loyalty by racking up price increases year by year on customers who renew policies whilist attracting new customers with heavily discounted pricing.
"Stamping out the loyalty penalty will force companies to adopt more rational pricing strategies. Insurers currently spend a whopping 29 per cent of home insurance premiums on acquiring new customers. That will fall as customer retention rates rise. Consumer inertia will increase as customers become less wary of being ripped off. As the focus on price diminishes, companies will increasingly be judged by the quality of their service. "
FT 1st June 2021
Wefox, Bought by Many and wejo look like reaping the rewards of investor confidence whilst incumbents fight inertia and legacy technology limitations.
A huge time for insurance.
German startup Wefox has raised a $650 million Series C funding round led by Target Global. Following this funding round, the company has reached a post-money valuation of $3 billion. Wefox is a digital insurer focused on personal insurance products, such as household insurance, motor insurance and personal liability insurance.