N26's co-CEOs Maximilian Tayenthal and Valentin Stalf
Did N26’s travel insurance policy lead to its withdrawal from the UK?
The German challenger bank cited Brexit as the reason for its exit, but there were other significant hurdles they couldn’t overcome.
The report instead suggests that the reason the German challenger bank decided to leave the UK was actually down to regulatory hurdles as a result of mis-selling the travel insurance offered as part of its premium subscription plan.
According to the article, N26 premium customers received an email in late 2019 stating that their subscriptions were under review and the bank required more personal information.
If customers failed to provide the required information by the deadline then their premium memberships would be terminated, as stated in the email seen by Sifted and Finance Forward.
The email also recognised N26’s failure to ask key questions about their customer’s health, particularly regarding pre-existing conditions, that could, in fact, exclude them from the insurance policy that they were paying for.
This meant that if a premium customer had fallen ill on holiday, they would not be covered by the insurance policy they were paying for.
N26 declined to reveal how many customers were affected, but it apparently refunded all those who didn’t meet the insurance health criteria as well as those who didn’t respond before the deadline.
“As part of this review, we introduced a more detailed sign-up process, to capture additional information about each customer and ensure the product met their individual needs.”
N26 confirmed that the extra processes have been in place since September 2019 and existing customers had also been contacted to confirm they fit within the constraints of the insurance policy, and those who were ineligible received a full refund.
The challenger bank’s travel insurance was provided by German insurance giant Allianz, who AltFi approached for comment but failed to respond.
N26 also said that the review had “no bearing on our decision to exit the UK market.”
Critics suggest N26 failed to launch a unique product into the very crowded UK market, which in turn resulted in their low user figures—when asked how many active customers it had, N26 declined to reveal the exact figure.
It’s clear to see that there were several obstacles in the way of N26 succeeding in the UK, and Brexit could have been a complication, but many are still of the opinion that Brexit was simply a scapegoat for its wider issues.