The Momento Moment: Bringing Next-Gen Auto Insurance to Mexico

Today we’re announcing our investment in Momento Seguros, a new full-stack auto-insurance carrier for Mexico. Memento is bringing the digital-first offering that consumers in other emerging markets already enjoy and expect across verticals. 

I’ve lived outside Mexico, my home country, for the past decade, but I returned for much of the Covid pandemic, eventually buying a car here, again, last year. My experiences with auto insurance in 2011 were horrible across purchase, claims (refuted), and eventually policy cancellation. While I was excited to keep exploring the country’s incredible towns, natural wonders and culture, the eventual encounter with the painful process of purchasing car insurance was making me anxious.

As a longtime fintech investor, I was hopeful that the fintech boom of the last decade would have improved at least the online purchasing experience, to reduce the number of phone calls and back-and-forth required. Boy, was I wrong. I experienced broken websites, multiple repeat-info entries, no online quotes, LOTS of calls, broken payment flows, and canceled quotes — not just online but also on the phone! 

Most carriers’ websites were awful (surprise!), but even the emerging digital players fell short on either product or experience, and many on both counts. Finally, after three weeks, I was able to get a new insurance policy, but I also acquired the strong conviction that there was a massive opportunity to bring a better offering to the market. 

We, at Foundation Capital, continue investing behind the secular trend that LatAm consumers are all finally online — particularly on mobile — and are increasingly comfortable transacting there. Millennials and Gen Z already buy 50%+ of new auto policies in Mexico and are now the fastest growing demographic for agents. Despite the shortcomings of current players, online has become the fastest growing auto-insurance channel since 2017, now accounting for >10% of policies sold as of 2020. 

Here we’ve arrived at the Momento Moment. Through Momento, Mexican consumers can now get customizable products along with a better onboarding experience, streamlined payments, and self-service claims management. On the backend, Momento uses the latest technology for anti-fraud and risk assessment, along with advanced segmentation capabilities to offer tailored products at solid rates. There are no gimmicks like pay-as-you go, or privacy intrusions like monitoring your driving.

Building a full-stack insurance platform is capital intensive and requires a meticulous set of processes to comply with local regulation, but the Momento team believes this is the only way to bring truly innovative products to market that address massive shortcomings. Lois and his co-founders, León and Andrés, have the right mix of raw talent and experience in insurance to pull it off, along with an executive team that includes leaders from the insurance industry with 20+ years of experience at Zurich, ING, and Qualitas (the largest incumbent auto insurer in Mexico). 
Unlike most insurtech carriers, Momento is partnering with agents and channel partners to offer embedded products from Day One via best-in-class agent portals and powerful APIs (we’ve written in the past about how this is crucial). For Momento, technology plays a role across all three cost areas:

1. Expenses: Remain stubbornly stable for all carriers as a share of premiums, and are high in absolute terms. Momento’s systems are designed to scale premium volumes without needing to add headcount linearly, and can profitably service policies with substantially lower premiums.
   
2. Claims: Momento is using the latest anti-fraud and customer segmentation technology, helping build a high-quality book of business from day one.
   
3. Acquisition: There’s so much friction in buying insurance online today that a streamlined, easy to use experience results in better sales conversion — not just for consumers but for partner agents as well (even when taking into consideration generous commissions).

While quoting Nubank’s success is now a bit cliche, we are inspired by their philosophy of bringing a product that is both cheaper and better for the consumer, winning share across all segments, and effectively expanding the market over time. Our investment in Momento is a bet that the team can expand the market by reaching some of the 70% of uninsured drivers in the country. (For anyone who wants to follow me down the rabbit hole, here’s more insight into our Momento investment thesis and a review of the Mexican insurance market.)

It’s been over a year in the making, but Momento’s recently launched product works wonderfully! When the time came to renew my old auto coverage, it took me less than five minutes, including the payment processing, to go from quote to online bind — without talking to anyone. I received my policy information, along with payment confirmation, within seconds. While this is just Day One and there’s a ton of work ahead, we believe Mexican consumers are about to encounter a new sensation with their auto-insurance experience: delight. 😎