Bloomberg Línea — Insuretech has become a booming sector in Latin America in the last few years, as entrepreneurs take a dated and clunky industry and apply technology to it to increase conversion rates and improve user experience.
So is the case with Guros, a Mexico-based online marketplace for auto insurance that today announced the close of a $5.8 million funding round. The money will be used to strengthen their platform capabilities, build Guros’ team, and enhance its APIs for commercial partners, such as Kavak, Creditas and albo. The round was led by F-Prime Capital and Cometa with participation from Clocktower and Snejina Zacharia, CEO and Co-Founder of Insurify.
Auto insurance is a $240 billion dollar market in Latin America with no player having more than 5% market share, according to Guros, but the industry has been slow to hang up the phone and meet customers where they are - online.
“If everyone hates being sold stuff over the phone, why is everything in insurance still done over the phone?” said Juanma Gironella, CEO and co-founder of Guros.
Gironella grew up around auto insurance - his father was an executive in the industry. Today, Guros is a family affair. Gironella’s father, Juan Gironella Garcia is Chairman of the Board and his brother, Javier Gironella San Juan, is COO.
Gironella always thought it was a little weird that all the work in insurance is done during the sales process, but there is virtually no contact or customer care once the sale is complete.
“They call you 25 times when they want you to purchase [insurance], but if you need something from them, you have to call them 25 times,” Gironella told Bloomberg Línea in an interview.
Gironella launched the first iteration of the company in 2013 and called it ARCA, but after four years of chasing product market fit, he pivoted the business into what we see today and in 2020 changed the name to Guros.
Similarly to booking a flight or a hotel on a travel website, Guros requires just three data points in order to provide you with a quote in 30 seconds. The company has contracted with eight auto insurance companies in Mexico so far, and quotes from all eight show up instantaneously. Guros makes a commission on each policy it sells.
“We are trying to make insurance work the way we all want it to,” Gironella said.
To offer more value to possible users and customers alike, Guros was faced with the challenge, “How do you provide value for someone that is hoping not to hear from you?” said San Juan.
The company came up with innovative solutions and now Guros offers perks before and after the sale. The company created a free digital wallet that allows anyone to organize all their auto insurance information in one place. The wallet then keeps the user up to date on traffic and parking tickets, upcoming inspection dates, any taxes that are due and also alerts the user about better priced insurance policies that have become available since their purchase.
Guros took a traditionally unpleasant sales experience and turned it into something customers actually like and that insurance companies profit from. By making the entire process digital, Guros has increased the conversion rate by an average of 15x compared to insurance companies’ own websites.
“Insurance companies told us that Mexican customers were not ready for a digital transformation,” said Gironella. But he thinks the opposite is true: insurance companies were not ready to change their internal processes to meet the demands of today’s rapidly changing digital world. Like other industries that have felt similar pressures, auto insurers have to adapt, and Guros is capitalizing on the customer base’s desire for change.
Having found success in the auto insurance industry, Guros is now dipping its toes into health insurance and has started working with one insurer. Like auto insurance, it’s an industry that has tremendous room for improvement, but it’s about more than building a better website; the practices need to change from within.
“They want to do it [go digital] but their day to day experiences don’t allow them to go forward,” Gironella said. “When we started, they wanted us to ask 76 health questions to our customers. And we said, ‘Are you insane?’”