Insurtech wefox, which is experiencing significant operational challenges, is now reporting that the insurance technology company is focused on its restructuring efforts as it receives support in the form of “strong’ investor support.
At an Extraordinary General Meeting of wefox Holding AG held recently, all current members of the Board of Directors “seeking re-election were confirmed by a large majority, ensuring continuity and stability.”
New to the Board are Nikolaus Frei and Richard Watts.
Mark Hartigan, who was re-elected to the board and who has “been acting as Executive Chairman since March at the request of the Board, will continue his executive function until at least the end of the year.”
Over the past 18 months, wefox claims that it “has undertaken a rigorous process to streamline its operations, focusing on shedding non-core assets and enhancing its core strengths.”
This period of intense restructuring “has included optimizing processes, reducing costs, and investing in key areas to build a more resilient and efficient organization.”
These efforts have strengthened wefox’s financial footing and operational capabilities, preparing it “for the next stage of growth.”
With this context, investors recently “reaffirmed their support for wefox, providing immediate fresh capital of EUR 25 million to support the ongoing restructuring efforts with further capital being realized through the continued sale of non-core assets.”
Work is now underway on a new strategy “to ultimately position wefox in the medium term as a leading, technology-enabled insurance distribution company.”
Additional capital measures are under evaluation by the investors “to support a new strategic and financial framework within a revised governance structure.”
The ongoing restructuring initiatives and asset sales “have been making rapid headway, with the bulk of the execution expected to be completed by year-end. Going forward, wefox will only focus on markets where it has profitable operations of critical size or is on track to achieving this within the next 12 months.”
In this context, the company will further “build out its leading market positions in the Netherlands, Austria and Switzerland, and will withdraw from the German market. Italy remains a core position in wefox’ business portfolio and will undergo a transformation to improve its profitability.”
Additionally, technology development efforts will “center on empowering local distribution platforms. Consequently, wefox is closing down its technology hubs in Spain and France.”
The new focus also means that the insurance carrier, wefox Insurance AG, will “no longer be part of the company’s core business.”
Various measures to strengthen the insurance company have “been successfully implemented, with a solvency capital ratio at 31 March 2024 of 176%, and the entity will receive continued Group support.”
In addition, wefox Insurance AG is actively “seeking the disposal of selected portfolios that are not in line with its future risk appetite, starting with the sale of the Polish portfolio.”
In line with these ongoing restructuring initiatives, the company’s Group Functions “have been significantly reduced.”
A number of the wefox executive and senior leadership team members, “including Group CFO Jon Wismer, will leave the company in the coming months.”
Work has commenced on a new and leaner management team “to guide this smaller and more focussed business to future success.”
Mark Hartigan, Executive Chairman, said:
“The restructuring of wefox has been profound but necessary. I’m grateful to Jon and the local and global teams for all of their efforts, which are helping to put wefox on a more sound financial footing fit for its future ambitions. With strong and committed investor support, we look forward to the next phase. We are determined to create value for business partners, customers and investors, retain and attract talented people and continue to drive innovation in local insurance markets.”
Founded in 2015, wefox is an insurtech driven by a single purpose: Empowering Insurance – driving the digital transformation of the insurance industry and “facilitating seamless collaboration among all stakeholders.”
