Nestor Solari, founder of Sigo.

Nestor Solari noticed about four years ago that his aunt, Silvia Planas Figueroa, had difficulty obtaining affordable auto insurance. 

She immigrated to the U.S. from Uruguay in the 1970s, he said. Due to her zip code and her lack of college degree, she couldn’t find an insurance price lower than her car payment from multiple insurers. Eventually she found a broker that could get the price down, but the agency required her to come in person to sign the paperwork and for a car inspection. The process was only made more frustrating for her because it was in English; Spanish is her native and preferred language, Solari said. 

His aunt’s story inspired him to create Sigo Insurance, a bilingual management agency with a mission to make auto insurance more accessible for immigrant and Latinx Americans. The Harrison, New Jersey-based group, which he co-founded in 2018 with business school friend Julio Erdos, assesses drivers solely on aspects such as driving records and behaviors, rather than meters such as credit score or education level. It also offers its services completely in Spanish.

After years during which the insurance business resisted change, a growing number of companies are moving into the insurtech space. Chicago-based Clearcover just announced a $200 million round, and Silicon Valley-based Next Insurance, raised $250 million in September. But few have Sigo’s mission.

Creating the insurance agency was one of the main reasons he went to business school at University of Pennsylvania’s Wharton School, Solari said. 

Sigo currently operates in Texas and California, locations chosen for their high numbers of working class and Spanish-speaking drivers, Solari said. There, Sigo sells insurance on behalf of about 10 companies, including Aspire General, MetLife and Assurance America, according to its website. Each partnership is different, but Sigo receives anywhere from a 10% to a 40% commission.

Solari said customers save anywhere from $100 to $500 a year through Sigo. Sigo gets the price down by not charging fees such as a broker cost, which is a flexible fee some brokers opt to charge, and late payment penalties. 

The agency announced a $1.5 million seed round last month, backed by firms including Columbia, Maryland-based Bonded Capital Ventures, Salt Lake City-based Demeter Capital and Park City, Utah-based Park City Angels. It was also one of four winners at Insurtech Hartford’s 2020 Innovation Challenge and took third at NY Insurtech’s 2020 Insurtech Competition.

Soon, Solari and his growing team of eight plan to launch Sigo’s own product and pivot the agency into an insurer in Texas. The group has been working on the process of submitting the required filings there, which includes an application and a plan of operation.

Built on Accessibility

Sigo was created on the notion that immigrant, Spanish-speaking Americans struggle to secure affordable car insurance because some insurers use qualifications such as credit scores or a lack of a college degree, Solari said. (Immigrants attend college at similar rates as native-born Americans, according to a 2015 report by the National Academies of Sciences, Engineering and Medicine. But Black and Hispanic Americans are more likely to have lower credit scores than any other demographic in America.)

These boxes often need to be checked in order to get discounted insurance, but have nothing to do with what kind of driver someone is, he said.

“If you happen to live in the wrong zip code, or maybe don’t have the right job, or you don’t have kind of a fancy education, like I was fortunate to have, it’s a bit gets harder to get auto insurance, and you end up not only getting worse coverage, but also paying more in an opaque kind of intentionally convoluted system,” he said.

A 2017 investigation published by ProPublica and Yonkers, New York-based Consumer Reports found that many minority neighborhoods in Illinois, Texas, California and Missouri pay higher insurance premiums than white neighborhoods. Their study found this to be the case even in high-income minority neighborhoods.

ProPublica and the Consumer Report’s findings have received pushback from the insurance industry. Following the published study, James Lynch, the vice president of research and information services at the Insurance Information Institute, wrote a piece for the Insurance Journal stating that the investigation’s findings were untrue. ProPublica responded, stating Lynch made “several errors” when discussing the methodology and stood by its investigation.

Last month, Lynch presented to the National Council of Insurance Legislators, where he spoke against the investigation again. “The study, unfortunately, made elemental errors that, once corrected, showed the exact opposite of what ProPublica asserted: auto insurers charge prices that properly reflect the actual risk in majority white and majority nonwhite neighborhoods,” he said during his presentation. 

Sigo’s process is fully online or through its app, which Solari says creates more accessibility for people, like his aunt, who couldn’t get to an in-person location during business hours easily. It’s a model many emerging insurance companies are following to offer lower rates.

“We’ve been able to get rid of a lot of the fees in that distribution layer with agents, because we’re distributing through a website and a mobile app instead of physical storefronts in neighborhoods that require lease and rent and utilities and staffing, etc, which ultimately are all costs that are passed on to the customer,” Solari said.

Like most spaces, the pandemic has pushed most, if not all, of the insurance industry to perform its services virtually, says Caribou Honig, a Richmond,Virginia-based venture capitalist and co-founder of Insuretech Connect, an insurance innovation conference. Whether or not groups who previously were in-person go back to those methods as the pandemic ends remains unseen. 

Still, as the many startups in the industry build models that will be permanently mobile, there emerges the question of how to build trust with customers. In the past, speaking to a human being on the phone or in person often made people feel confident in the product, Honig said. Digital companies often make up for that by building confidence in other ways, such as offering extended cancelation periods.

Honig is not so keen on this shift to virtual service. “I think there’s opportunities for startups to be part of the shift to digital forms of delivery,” he said. “But I’m also not sure that just going digital is the answer for anyone. I’m not sure it always delivers value.”

Growing Insurtech Space

Insurance is an industry that has held onto traditional pre-tech ways longer than most financial industries, Honig said.  

“Even the internet was not a strong enough irresistible force to change the immovable object of the insurance industry,” Honig said. “But you layer on all of these other technologies and the amount of value opportunity, the value to be created, was just too much for even the insurance industry to hold back the waters.” 

One of the biggest areas of innovation, he says, are Application Program Interface-focused developments, such as the push toward embedded insurance when customers buy other products. It’s an area that will allow startups in the area to really contribute to the distribution, Honig said, because large companies can pilot these innovations with ease.

Another is innovation of actual insurance products, such as of the risk or underwriting, which Honig said he’s seeing more and more, steadily.

“I think it’s still early days of folks really trying to innovate around product, but I’d like to see more,” he said. And most of all, I get really excited when I hear about entrepreneurs that want to innovate around product in a way that will interact with risk with the underwriting at the same time.”

Navigating Funding as a Latino

While building Sigo, Solari learned he had to tell a compelling story while pitching in order to raise capital. The problem he is tackling is one invisible to many investors’ experiences, and he had to make them empathize with a customer they have never met before.

“I think a lot of times when you’re pitching funders that are overwhelmingly white and male, you get blind spots, right,” he said. “We’re very much solving a problem that most funders have not experienced firsthand, or even second hand through family relationships like I have.”

Solari says it’s improving a bit. He points out that Hispanic entrepreneurs have been growing at the fastest rate in the U.S. and he’s noticed more of an effort from traditionally white funders to fund diverse ideas. “There’s still a very, very long way to go and we haven’t even scratched the surface of solving the problem, but it’s been good to see at least more intention and more money flowing that way,” he said. “But there’s still a lot of structural challenges that need to be addressed.”

What’s more, Sigo’s leaders all identify as Black or Latinx.

“We’re all driven by our mission, as much as the financial opportunity to serve the second largest Spanish speaking country in the world after Mexico — bigger than Argentina, bigger than Colombia, bigger than Spain,” he said. “I think there’s a lot of opportunity in the market that has been traditionally ignored and traditionally underserved.”

This story has been updated to reflect the filing requirements applicable to Sigo.

This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit and connect with and