The $1.5M seed round, with participation from Amicle Capital, Bonded Capital Ventures, Demeter Capital, Financial Solutions Lab, Park City Angels, and gANGELS, will allow Sigo to launch an auto insurance product that removes biased rate factors from day one of the underwriting process.
“Traditional auto insurance companies favor a specific type of customer—affluent, suburban drivers who have consistent coverage and can afford increased coverage limits. But this largely excludes a demographic that’s made up more than half of America’s growth in the last decade—the Latinx population. Customers are left penalized for having limited credit, education, or insurance history, factors that have zero impact on how you drive,” said Néstor Hugo Solari, Co-founder and CEO of Sigo.
Founded in 2019 by Latino entrepreneurs Solari and Júlio Erdos, the company has since written hundreds of thousands of dollars in premiums through its agency business and maintained a customer retention rate of more than 80% in Texas and California, the two states where you can currently access Sigo’s natively bilingual platform. Sigo will soon launch their own insurance product in Texas that challenges the disparate impact in auto insurance by replacing the use of discriminatory metrics with other tools like telematics, via the U.S.’s first Spanish-language safe driving app.
“Emerging standard auto insurance is a $20 billion market, but because basic liability coverage is less profitable for legacy insurers, they ignore and/or overcharge customers,” said Karl Gouverneur, Chief Technology Officer at Struxtion, former CTO at Northwestern Mutual, and an investor in Sigo. “Sigo has built a solution for a vastly underserved segment of customers who, unfortunately, may only know a discriminatory system.”
In addition to how the insurance industry is serving its customers, concerns have also been raised about the lack of diversity within the industry itself, as seen with the National Association of Insurance Commissioners recently launching a Special Committee on Race and Insurance. Industry-level data from the U.S. Bureau of Labor Statistics shows that only 21.4% of employees in the insurance workforce in 2019 were categorized as nonwhite.
“How can insurers serve immigrants and Latino customers if the industry itself lacks an understanding of their experiences and needs?” asks Erdos. “The lack of diversity within senior levels of insurance creates blind spots. That’s why Sigo is proud to serve our community with a team that is 100% Black- and Latinx-led.”
Mentorship and funding support from programs like Entrepreneurs Roundtable Accelerator and gener8tor have played a key role in helping Sigo expand its reach and team. The company continues to grow and is currently hiring for Director- and Manager-level positions across marketing and customer success.
Sigo’s advisory board members, who bring decades of leadership experience across finance and insurance, have also played an integral role in the company’s growth. Members include Karl Gouverneur, former CTO of Northwestern Mutual and Safeco Insurance, Bob Sargent, specialty lines insurance founder, advisor, and investor, and Bill Goddard, an insurance veteran and investor at Electromagnetic Advisors.
Source: PR Newswire
