Gabi’s insurance comparison-shopping website aims to reduce the amount consumers overpay for insurance.San Francisco-based online insurance comparison shopper Gabi Personal Insurance Agency, Inc. recently secured $9.5 million in Series A funding. Leading the round of funding was Canvas Ventures, with contributions from Correlation Ventures, Northwestern Mutual Future Ventures, and Securian Ventures.
In August, the startup received $2.6 million in seed financing from angel investors A Capital Ventures and Project A, both of whom also invested in the Series A funding raise. Now backed by more than $12 million in investment capital, Gabi aims to expand its offerings across the country over the coming year.
Finding Lower Rates
Like many insurtech startups, Gabi uses sophisticated technology to help consumers find the lowest rates for auto and home insurance. After gathering insurance information from customers and then scanning prices from major insurers, Gabi alerts policyholders when cheaper rates become available. According to the company, 60% of its customers have already cut their insurance costs by an average of $460 per year.
Many consumers neglect to lower their insurance premiums simply because they fail to comparison shop. In fact, 62% of respondents to a Princeton Survey Research Associates/International/InsuranceQuotes survey said that comparison shopping takes too much time.
CEO and co-founder Hanno Fichtner said that Gabi’s digital platform strives to make that process easier, putting a dent into the estimated $50 billion insurance customers overpay each year. Consumers, he added, may be unaware that changes in their personal life (such as a new car or home) or rate revisions by the carriers can have a dramatic impact on their rates. “We tried to reduce that amount with technology,” Fichtner said.
If they find suitable coverage at a reasonable price, Gabi customers can switch policies at any time without needing to repeatedly fill out lengthy insurance forms. After launching its auto and home insurance products in California in 2017, Gabi now offers auto, home, renters, umbrella, and life insurance in Ohio, Texas, North Carolina, Pennsylvania, and Arizona.
What Agents Can Learn from Gabi
In many ways, Gabi functions much like any other insurance agent. It has partnered with major firms including Nationwide, Travelers, Safeco, and Clearcover, a new online auto insurance company affiliated with American Family Insurance, and receives a commission when a customer designates it as his or her agent of record, according to its website.
Nevertheless, Gabi’s approach to insurance is a model that every agent should emulate, especially as car insurance rates continue to skyrocket. Agents must always analyze carrier prices to find cheaper rates for their clients, and recent data collection technology can only aid in that process helps. Gabi doesn’t rely solely on its app to complete transactions, however. Customers can also interact with a live customer agent if they choose. Independent agents also need to blend technology with a human touch.
Gabi points to the 35 to 55 age group as its fastest growing customer demographic. Independent agents should therefore target that audience, as well. The company also targets customers who may not be actively looking to switch insurance carriers, but could save money if they do so. The lesson for independent insurance agents is to remind clients that insurance costs can be lowered by comparison shopping, and that an agent, not an app, is the trusted resource to turn to when they want to reduce their premiums.