Frankfurt The Berlin Insurtech Element is moving closer together with the Cologne commercial insurer Mailo. As part of a strategic partnership, Element will take over the portfolio of the digital insurance company.
From August 15, Element will also act as the insurer (risk carrier) for Mailo’s new business. Mailo, in turn, returns his insurance license. The Handelsblatt learned in advance of the transaction, which is still subject to approval by the financial regulator Bafin.
Mailo specializes in digital insurance solutions for commercial brokers. The Insurtech was founded in 2017 and approved by Bafin as an insurer in Germany in February 2019.
With the return of the license and the strategic partnership with Element, Mailo founder Matthias Uebing hopes that he can now concentrate more on sales and the further development of the products tailored to the needs of customers. The aim is to combine the strengths of Mailo and Element, emphasizes Christian Macht, Co-CEO of Element.
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In the future, the Insurtech will ensure that Mailo’s products and individual brokerage concepts are offered quickly and cost-effectively. As a so-called white-label insurer, Element develops insurance for partners who sell it under their name.
The two insurtechs will continue to operate as independent companies on the market. Element becomes the primary insurer for Mailo. However, the Berliners will not be the exclusive insurer, as there may be risks in the future that Element cannot cover.
Element gains three more divisions
At the same time, Element has had Bafin approve three other lines within its property and casualty insurance license. The insurtech can now also insure against hull and liability risks in the shipping sector as well as financial losses such as loss of profits. The first partners are already active.
In total, Element now covers 25 risk types. “The expansion of the business area is another important step for Element in order to achieve the targeted increase in sales of 100 percent compared to the previous year,” says Macht.
Element recently received the money it needs to continue growing. The insurtech was able to collect 21.4 million euros from investors, although the financing conditions for start-ups have become significantly more difficult due to the uncertain situation surrounding the war in Ukraine, high inflation and rising interest rates.
The environment for start-ups has changed significantly recently
In addition to the investment environment, the regulatory environment has also changed significantly in recent years, according to Element. It is not easy for young companies to grow sustainably, nationally and internationally, across all sectors. The cooperation with Mailo therefore also helps to position the company even more strongly on the market.
Element and Mailo are two of seven start-ups that Bafin has granted an insurance license for since 2017. In the meantime, the supervisory authority has criticized the fact that the young insurers planned too little money at the start. Since they only have a few customers at the beginning but have to invest a lot, they usually have difficulties in breaking even.
According to the solvency report, Mailo achieved gross premium income of almost 2.5 million euros last year. The net loss for the year was 4.1 million euros.
Element reported gross premium income of 10.4 million euros and an overall loss of 13.9 million euros. The decision in favor of the strategic partnership and the return of the insurance license by Mailo should therefore also have something to do with cost advantages.
More: Insurtech Element raises 21.4 million euros