Challenger bank N26 to offer insurance products
Fintech startup N26 is launching N26 Insurance as it plans to offer insurance products that you can access from the company's mobile app and website. The first insurance product is a smartphone insurance plan for German customers.
But the startup doesn't plan to stop there. N26 says it is also working on private liability insurance, home insurance, life insurance, pet insurance and coverage for bikes, electronics and large purchases.
The idea is that you'll be able to purchase coverage, manage your plans and initiate claims within the N26 app. As N26 already has your personal information, it should be easier to sign up to a new insurance product through N26 compared to creating a new account in a separate app.
The challenger bank isn't becoming an insurtech company overnight. Instead, it is partnering with other companies, such as Simplesurance, for those products.
The big thing we're doing in Q1 and Q2 is a big focus on the marketplace," co-founder and CEO Valentin Stalf told me a few months ago. Early on we always tried to integrate the full experience."
N26 Insurance is the first release of this new API-driven strategy. Partners will be able to integrate their products on their own and N26 will make it easy to share KYC files (know your customer'), transfer money between N26 and partners, etc.
Most fintech startups are super low frequency," Stalf said. He mentioned mortgage as one financial product that you set up once and never touch again. These companies have high customer acquisition costs, so N26 can help on that front. For instance, if you purchase a bike online, N26 could recommend a bike insurance product after your purchase.
As for phone insurance launching today, prices will vary depending on your phone. If you spent a lot of money on your phone, your insurance plan is going to be more expensive. N26 lets you opt for annual plans to save a bit of money.
Phone insurance also contributes to the freemium strategy of N26. The company offers free and paid accounts that start at 4.90 per month. The most expensive plan, N26 Metal, costs 16.90 per month and includes phone insurance.
Some customers who might want to insure their phone might be tempted to switch to N26 Metal to insure their phone and get more features, such as travel insurance.
N26 started revamping its plans in November 2020 by introducing a new mid-tier plan called N26 Smart. In Europe, N26 no longer sends you a plastic debit card if you create a free account - you get a virtual debit card that you can add to Apple Pay or Google Pay by default. You either have to pay a one-off 10 fee to receive a plastic card or subscribe to N26 Smart for 4.90 per month.
Offering new products in the app and pushing users toward paid subscriptions should definitely help N26 when it comes to profitability. The startup has grown tremendously over the past few years and the company is focused on consolidating the business as much as possible now.