Wefox as a money machine?
Wefox had set itself the goal of connecting insurance brokers and private customers while keeping everything as simple as possible. The latest achievement was the Wefox app, which should be able to easily manage all insurance contracts via smartphone. CEO and founder Julian Teicke never tired of always pointing out the great achievements and the good status of Wefox. Around 400 people were still employed there in 2020, 42 of whom worked in Switzerland. The turnover for 2019 should amount to around 130 million dollars, there should be around 2,000 brokers and 500,000 customers. Unfortunately, at least the Wefox app was probably not so well received, because the ratings in the various stores were unanimous: poor service, poor accessibility and little more than the absolute minimum in terms of support. It's different with neotralo with its app, which not only promises the digital management of insurance contracts, but also keeps it and is now the only alternative after the disappearance of the Wefox app from the market. It's also worth it, but more on that in a moment.
The Wefox Group was founded in 2015 and has been able to steadily increase its annual turnover level. It is now active in six countries and raised the record sum of 125 million US dollars in a B series in March 2019. This was one of the main reasons why international investors became aware of the company. Above all, the subsidiary of the same name and ONE Insurance were the driving forces behind the expansion. Then came the focus on the digital distribution channels through which brokers and customers around the world were to be connected. ONE Insurance was soon recognized as the fastest growing insurance provider. Independent insurance brokers got together and from then on could be found at Wefox.
Then came 2020 and not the crisis like for everyone else, at least not for Wefox. Allegedly, the funding for Getsafe in the amount of 25 million euros was the largest Insurtech funding, but then everything turned out differently. Wefox came back on the scene and collected around 100 million in September. 25 million was booked as a loan, 75 million as a convertible loan. This event leads to the conclusion that Julian Teicke has done it again. He is always considered very brisk, but he seems to get along with funding. He describes himself and his company as a unicorn, which refers to companies that are already classified as start-ups with a value of around one billion euros. In the fintech industry, this has so far only been the case for N26, at least for those that were launched after 2010.
All well and good, but?
? is all this really true? Even if the CEO of the Wefox Group publishes such full-bodied announcements and throws figures around him that make other companies green with envy, some of them cannot be understood. Because: the numbers may be correct, but they cannot be verified. The associated annual reports are not publicly available, which makes it impossible to check them. In addition, it may seem strange that Wefox is allegedly setting up new financing with 100 million euros, but that it has been kept silent about it. Shouldn't one be proud of the achievement and present it in public like others? For reasons of prestige alone, it is not understandable to hide such funding. According to experts, one reason could be that debt capital is often perceived as less good and consequently does not sell as easily. A capital increase would be the better alternative, but it just wasn't there. But maybe Wefox will want to top it up again in the coming year and then publish an even higher sum. However, the history of Wefox also shows that although many things are possible what the company has set out to do, not everything works out. An example of this is the expansion to Asia, the USA and also to Great Britain, which flopped. Another example could be the Wefox app, because it looks like it has disappeared overnight.
Where is the Wefox app?
The Wefox app is suddenly no longer available and cannot be accessed via the Google Play Store or the Apple App Store. However, this only annoys people who want to register as users. Much more affected, however, are Wefox customers who had previously relied on the service and were now sent off with an email. It said that a restructuring had been carried out and that the cooperation between Wefox and the consultant was ending. From now on, access to the Wefox app should be deactivated. Nothing there, because of the? Digital management of all insurance contracts ?! Kindly there was some additional information that should explain some things to the (now former) users of the app. It was pointed out that the previous advisor was still available and was still the point of contact. What was kept secret: Access for the consultant was also deactivated. He can only access the documents available in order to even carry out his work as a consultant. As an aid, Wefox said that the contact details for the consultant that were given in the initial information could be used. Nevertheless, there is still no access to the data on the part of the user.
Existing insurance contracts should not be terminated because they were only concluded via the app, but there with real insurance companies. This in turn means that customers will continue to be insured and that nothing will change in the contracts. However, you can no longer manage them just like that. A direct inquiry with the consultant is necessary, who is likely to face a flood of inquiries in the foreseeable future and for that reason alone will hardly be available directly. The simplifications made possible by the Wefox app have now been withdrawn and clear problems have given way, at least during the changeover period. The question arises as to what actually happens to the data stored in the app. These are stored by Wefox for a certain period of time, after which they are deleted.
Theoretically, Wefox's customer service, which can simply be contacted by email, can still be reached. However, customers had previously complained about problems with accessibility, so it is to be expected that the sheer number of inquiries is likely to exceed the capacities of customer service.
Wefox says that himself
Wefox recently wrote to its brokers and informed them that all cooperation agreements had been terminated. A restructuring was carried out because a new strategic direction was being planned. This would mean that operational activities with the brokers would no longer be possible, and their customers' pension applications could no longer be transmitted to Wefox. At the same time, the brokerage fees were canceled, which means that no more sales are possible via the app. At the same time, it was announced here that the app was deactivated on February 28th and that the brokers would no longer have any means of accessing, managing and looking after customer accounts. It will remain in the notification that Wefox will contact the broker when new contracts are in place.
For the brokers, this means that they have been completely unexpectedly released from their obligations as contractual partners, but at the same time they will no longer collect any commissions.
Neotralo as an alternative?
Now customers and brokers are on one side, Wefox on the other. Understandably, one is extremely annoyed with the current situation, as there was previously no evidence of this development at Wefox. Apart from the short notifications, there was no communication, everything was handled clandestinely in the background. This is a method that neotralo does not rely on. The strongest competitor of the Wefox app to date offers an alternative and a similar concept with its own neotralo app. With the difference that the main focus here is on transparency. So far, around 250 brokers and more than 5,000 customers have been using the app, although it is to be expected that their numbers will skyrocket. Since it was founded in 2019, neotralo has grown slowly but steadily and is now one of the few neutral comparison portals in Switzerland. With the neotralo app, you are also following the path of the digital age and rely on people preferring simple solutions. The neotralo app offers the possibility to manage the insurance contracts clearly on one platform and to manage them from here. The comparison of conditions is just as possible as advice directly from an expert broker. If necessary, new contracts can be concluded or existing ones can be expanded or changed and adapted. The basic principle of the neotralo app is therefore comparable to that of the Wefox app. However, the focus here is on running a reliable app that does not depend on immense funding. Better slow, steady growth than complete overconfidence! Accordingly, the neotralo app is currently the only alternative to the Wefox app, which is actually considered useful, to be found on the Internet.
Interesting new messages
The most important tops and flops in the insurtech industry were recently announced. Wefox was once again highlighted, especially the digital subsidiary ONE was mentioned in praise. This offers both household and liability insurance as well as motor vehicle policies. Allegedly ONE was able to record a growth of more than 500 percent, which led Oliver Lang, in his character to CEO of ONE, to state that no other digital insurer came to half a million contracts so quickly. Allegedly they were already on the way to break-even in 2020, in 2019 the loss was only two million euros. It is assumed that 2021 will also run well and that the sales mark of 100 million could be topped for the fourth year in a row. It was only in February that ONE Versicherung AG was renamed Wefox Insurance AG and the individual business units are now being reorganized by Julian Teicke. A new subsidiary is already planned, which will be named Koble and will provide the programming interfaces. The subsidiaries and the wide range of products make Wefox one of the best-rated Insurtech companies in the entire DACH region. Teicke is now even planning to go public in the near future and wants to attract a wide range of investors.
But how does the surprising attitude of the Wefox app fit into this concept? Has the digital offer fallen victim to this brand changeover? Those responsible speak of a restructuring as the reason for deactivating the app, but if it supposedly ran so well, was so heavily frequented and made everyday insurance easier for so many people, why then this route? At least the question arises here, why you couldn't communicate with customers beforehand and swear them to the way ahead. Why were they completely surprised and now have to coordinate their well-ordered insurance contracts themselves or turn to the broker, who should be hopelessly overwhelmed in view of the situation? Questions about questions that will hopefully be answered soon by those responsible.
Conclusion: Wefox could not be quite as successful as shown
It is certainly speculative to claim that Wefox has taken over with its offers and reported a little too grandly about its successes. What exactly is behind the sudden deactivation of the app offer is not (yet) known. In any case, it came as a surprise to everyone involved and they understandably feel taken by surprise and let down. The only alternative currently available is the previous competitor offer of the neotralo app, which relies on transparency and communication instead of big words and hidden deeds.
