European Insurance Firm Notifies Shareholders Of Possible Bankruptcy
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The new British head of Wefox, a large insurance technology company in Europe, has warned investors that it could shut down in a few months because of many financial and regulatory problems.
The European insurance company, with almost 3 million customers and worth $4.5 billion (£3.6 billion) less than two years ago, told its shareholders it might go bankrupt by the summer.
Wefox Aims To Address Financial Losses, Particularly In Its Italian Unit
The troubled state of the firm, which was valued at $4.5bn (£3.6bn) less than two years ago, has lenders like JP Morgan and Barclays. This makes it the latest largest tech firm in Europe to face a serious crisis.
Mark Hartigan, Wefox’s new Chief Executive Officer, described a grim situation where its holding company “could go bankrupt in August, or possibly even sooner.” This was disclosed in a letter sent to shareholders earlier this month.
Mr. Hartigan, the former leader of the UK-based insurance mutual and friendly society LV=, stated that the firm was having urgent talks to stop losses in its Italian branch. With plans to shut down operations in Germany, sell a portion of its business in Poland, and end a partnership in Switzerland.
He concluded that Italy has been using consistently wrong operating ideas and now lacks ongoing Group cash support, making it bankrupt.”
Mr. Hartigan also informed investors that its obligations in Germany were significant and could create a large cash burden on the firm. Wefox is supported by some of the world’s largest tech investors, including G Squared, Target Global, Canada’s Omers Ventures, and the Abu Dhabi sovereign wealth fund Mubadala.
Wefox Seeks To Revolutionize The Insurance Industry Using Technology
Wefox’s British-based investors include Chrysalis Investments, the London-listed fund that recently reduced the value of its stake in Wefox by a third.
Established in 2015, Wefox sells insurance products through its own and external insurance brokers and has often talked about its goal of changing the insurance industry using technology.
Mr. Hartigan assumed his new executive position from Julian Teickle, one of the firm’s Co-founders. He stated in a public announcement in March that his transition to become president would enable him to spend more time and effort on his great passion. He is focused on helping founders in creating their projects.
In his memo to Wefox investors, Mr. Hartigan stated that the ongoing restructuring efforts give some hope that a stronger, more sustainable company might spring up of the process.
