Revolut faces £10.4M lawsuit from Allianz 😳; Buy Now, Pay Later (BNPL) encounters existential threats? 🤔; Raiffeisen Bank goes crypto 👀
FinTech is Eating the World, 24 October
Hey Everyone,
TGIF! What a week it was… 🤯 But it’s not over yet as today we’re looking at Revolut that faces £10.4M lawsuit from Allianz (what it means & why it matters + a deeper dive into Revolut), BNPL encountering existential threats (is it really that bad + deeper dives into companies that are crushing in this space), and Raiffeisen Bank going crypto (institutions keep on delivering). Let’s jump straight into the intriguing stuff 🌶
Revolut faces £10.4 million lawsuit from Allianz 😳
The news 🗞️ Financial technology heavyweight Revolut is being sued by insurance giant Allianz for £10.4 million over allegedly breaching the terms of a recently terminated travel insurance agreement.
Let’s take a closer look at this.
More on this 👉 In April 2022, Revolut and Allianz Worldwide Partners signed a 4-year deal to provide travel insurance to Revolut's premium and metal account holders in certain regions.
However, in May 2023 Revolut informed Allianz it would be moving its customers' travel insurance to Cowen Insurance starting in June 2023. Ups, just business 🤷♂️
According to the lawsuit filed by Allianz, Revolut did not provide the contractually obligated 6 months’ notice when deciding to terminate the deal early. Additionally, Allianz alleges Revolut stopped providing required daily reports detailing the number of eligible account holders after the termination announcement. For some reason, this isn’t too surprising…
Accurate reporting was necessary for Allianz to calculate monthly premiums owed.
The legal filings also claim Revolut breached its obligation to not make changes to the insurance product or conditions without Allianz's written consent. By shifting customers to Cowen Insurance, Revolut allegedly altered the product and terms on which it was offered.
The £10.4 million in damages sought by Allianz represents projected losses based on anticipated customer numbers and claims.
Revolut has declined to comment publicly on the lawsuit.
✈️ THE TAKEAWAY
What does this mean? 🤔 This legal dispute adds to the challenges faced by the high-profile FinTech startup as it aims to continue rapid expansion while building profitability and Super App ambitions. If Revolut fails to successfully defend against Allianz's claims, it could face a substantial financial penalty. The termination of the Allianz deal also necessitates developing replacements for important parts of Revolut's product portfolio like travel insurance. This wouldn’t be too big but it would still be a hit. Zooming out, we must note that as the company grows (and maybe becomes a bank in the UK?), properly managing third-party partnerships and contractual obligations will only gain further importance. House must be in order, especially if you want to become the leading global super app. And now it’s just too messy…
ICYMI: The bumpy road ahead for Revolut's global ambitions 🌍 [holistic view at Revolut’s strategy and moves thus far + lots of bonus reads & deep dives]