Some straight talking from the IE Editor;
It’s been an interesting week or so for Wefox, the insurtech once valued at billions, but on the receiving end of some scathing comments from its actual customers. IE has wondered in the past where the huge sums of investor cash have been spent and what makes this company special – a unicorn if you like. It’s one thing to state that insurance distribution is sometimes held back by too many layers, too many companies looking for a commission on their slice of the pie perhaps, but how do you streamline that without fundamental regulatory reform in key markets?
This is a similar question that Lloyd’s are trying to resolve with Blueprint Two, how to take a paper system that existed for centuries and do more than just replicate processes online. You have to chuck out some of the old tech, otherwise insurtech doesn’t really mean anything beyond automated tasks and box ticking.
WHERE WE ARE
So the mainstream media are reporting that Wefox might run out of cash in the summer, based on a memo statement made by its Chairman Mark Hartigan – allegedly, according to Sky News and others. Apparently discussions are taking place to close the German operation, which is interesting if you read the Trustpilot feedback from the wefox Germany site. Threats of litigation, accusations, general anger kinda sums up the vibe, which is not a good sign for investors in Wefox.
Read more Trustpilot feedback here from Germany.
Latet in 2023 Wefox brought in Paul Onnen as CTO, who has vast experience with Amazon, Google and Expedia as regards platforms and making them work well. A good sign. Meanwhile the Mail Online reports that Wefox might be in negotiations with Ardonagh regarding a potential sale. Certainly Ardonagh has the funds, but what do they stand to gain by acquiring the Wefox platform given that Hartigan sees the Italian Wefox operation as being insolvent (according to the leaked memo) and the German customers are furious?
THE FUTURE
Recently Chrysalis reportedly added a further £3m to the pot, as a token of faith in the Wefox future, but given the $110m funding round last year that’s quite a small sum in comparison. Wefox needs some big client wins soon, some proof that their distribution on product lines saves time and money and can do so at scale, fully compliant, no glitches. It’s a brutal world out there with cyber criminals attacking platforms daily, so the distribution systems that keep the lights on and customers money safe will probably win in the end.
IE emailed Wefox this week for any updates on its future and it will be interesting to see what emerges as a response.
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