Electronic Chat with Nestor Hugo Solari, Founder/CEO, Sigo
Laura Mazzuca Toops | May 10, 2021
A recent study by EY and the Peterson Institute of International Economics finds that the Hispanic population plays a disproportionately large role in U.S. economic growth -- creating new businesses and jobs, adding employees to the workforce, and driving demand for U.S. goods and services, including insurance.
Sigo is an inclusive auto insurance provider focused on the $20 billion emerging standard auto insurance market, is specifically focused on the overlooked market segment of immigrant and Latinx customers. Sigo provides affordable access via its direct-to-consumer platform that is tech-enabled, bilingual, and mobile-first. By helping customers with limited insurance histories get basic auto insurance, Sigo is better serving this segment of drivers by providing transparent and reliable coverage. Sigo is currently available in California and Texas and was co-founded in 2019 by Néstor Hugo Solari and Júlio Erdos.
Sigo specifically targets immigrant and Latino auto customers in Texas and California with a bilingual platform. Specifically what tech tools do you use to connect with customers?
A mobile phone is the only thing our customers need to get insurance. Sigo has a mobile app for policy management, and the first Spanish-language safe driving app in the U.S. Our system allows customers to seamlessly purchase and change their auto insurance policy.
The insurance industry’s disparate impact underwriting metrics have long been seen as problematic to many outside the industry. What tech innovations (such as big data) will Sigo use in the development of its upcoming insurance product to replace it?
There are many opportunities to replace things like credit score, education, and employment with more fair rating variables. One thing our new product incorporates is the use of telematics data. Our customers can opt into sharing their driving data to get a discount. Our app not only shares this data with us, but it also helps our customers become better drivers by giving them tips on how to improve--such as slowing down in certain areas or avoiding sharp turns.
We are also exploring several additional ways to measure customer responsibility through things like psychometric data. Beyond this, we now have access to accident data based on location and GPS that allows us to not only focus on where the customer lives, but also where they spend their time.
What does Sigo find attractive about your target market in terms of profitability?
Loss ratios are lower for our segment of the market than the broader auto insurance market. The challenges with profitability with legacy insurers and distribution are a relic of dated systems and operations. With technology, we'll not only be able to more effectively understand our customer, we can manage and distribute at a much lower cost by simply building on modern frameworks.
Sigo has assembled an impressive advisory board, including former Northwestern Mutual CTO Karl Gouverneur and Bob Sargent, specialty lines insurance founder, advisor, and investor. What’s the best advice they’ve given you regarding the company’s development?
Our advisors are constantly providing useful insight and feedback. Their experience has been invaluable in our journey and it is difficult to pick out a single piece of advice. One piece of advice we do often refer to is that we want to “move fast, but not break things” -- alluding to the (in)famous Facebook motto. Insurance is highly regulated, and while we want to move fast as a startup, we can’t break rules or be noncompliant as easily as companies in other sectors may be willing to.
What role do agents play in Sigo’s future growth plans, and how are you using technology to connect with them?
Sigo is direct-to-consumer for the time being. In the future, we could envision providing agents with APIs or embedding our auto insurance within their other digital products but at the moment our focus is on reaching our target customer directly.
Sigo recently raised $1.5 million in seed investment to develop its insurance product. Are you anticipating future funding rounds, and what will they be used for?
We will go back to the market to fundraise for geographic expansion and to expand our offerings. We also expect to keep more of the risk in the future, which will require additional capital.
Sigo is currently focusing on the Southwest. Are there plans to expand nationally?
We have already identified a handful of states, including those across the south and west, where our services are immediately needed. With time, we not only see ourselves expanding nationally, but internationally.
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The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
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