Insurtech Gabi raises $9.5m for US expansion
Gabi, which provides a free, online "personal insurance shopper," has raised $9.5 million in Series A funding, led by Canvas Ventures, to accelerate its nationwide expansion in the US in 2018.
"Instead of relying on insurance agents who may be driven by commission or only compare a few quotes, Gabi's technology automatically scours the 25 largest insurance companies in the US, including Nationwide, Travelers, and Safeco, for the best rates and most relevant offerings," said Hanno Fichtner, CEO and co-founder, Gabi.
"We estimate roughly $50 billion are overpaid by insurance customers in the US every year, and we'd like to put some of that money back into our customers' pockets," Fichtner added.
Based in San Francisco, Gabi is automating insurance shopping. The company began offering auto and home insurance in California in 2017. Today, Gabi-sourced insurance is available in California, Ohio, Texas, North Carolina, Pennsylvania and Arizona. Gabi currently offers insurance for auto, home, renters, umbrella and life.
Gabi co-founder and CPO Krzysztof Kujawa, said: "Gabi's technology continually 'comparison shops' and provides data-driven recommendations. We give our customers peace of mind knowing we are always looking out for them since insurance rates and offerings constantly change. We have seen two out of three of our customers save money on insurance. And the average savings on insurance from using Gabi is $460 per year."
Gabi connects to the current auto or home insurance account of the customer, compares prices, discovers the best offers, and presents opportunities to switch. The customer then manages all insurance products using Gabi's app. Unlike existing auto comparison shopping sites, Gabi offers customers a service agent to speak with if desired, or they can interact only with the app. If customers choose to switch at any time, they are not required to repeatedly fill out long insurance forms, and they are not spammed with unwanted calls or emails.
Rebecca Lynn, general partner at Canvas Ventures, said: "We think the market for Gabi's unique insurance-shopping technology is sizable. We also think the technology can be tailored over time for a range of insurance products." Lynn believes Gabi is going after the $75 billion worth of commissions that are paid every year in property, casualty and life insurance.
According to the company, their fastest-growing demographic is the 35-55 age group. They also target 'passive' shoppers who may have looked for insurance years ago but have not had the time or patience to constantly research. Many of their customers have multiple types of insurance such as auto and home. In addition, Gabi customers have 'loss ratios' well below the industry average of 70 percent. The average loss ratio for Gabi customers is below 30 percent because of the algorithms Gabi uses to source them. The low loss ratio of Gabi customers means they tend to file fewer claims than the average insurance customer.
In addition to working with long-established insurance companies, Gabi recently formed a partnership with Clearcover, a new “online-first” auto insurance company that is backed by American Family Insurance.
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