Crabi, a Mexican insurance startup, intends to shake up the lucrative Mexican auto insurance market using artificial intelligence by predicting driver behavior.
Dubbed an “insurtech startup,” Crabi recently raised $1.3 million in startup money to get their platform off the ground. Led by Redwood Ventures, they aim to become a leader in car insurance in Mexico.
Crabi uses a “Fair Drive” model and personalizes auto insurance plans based on a person’s driving records, so drivers with a safe driving record could pay less than others with a not-so-clean record. The National Commission of Insurance and Finances has authorized Crabi to issue digital policies starting in Q2, 2019.
When this was written in 2019, Crabi’s website had yet to release any information on its products, so it was too soon to tell if its policies would be offered to non-Mexican citizens, but all drivers must have a Mexican auto insurance policy when operating a vehicle in Mexico: vehicles on Mexico's federal roads, routes and bridges must carry insurance covering damage to third parties (Ley de Caminos, Puentes y Autotransporte Federal, art. 63 Bis), and US and Canadian insurance is not proof of financial responsibility under Mexican law (Baja Bound FAQ).
Mexico has relied mostly on established insurance companies to write auto insurance policies.
One immediately apparent issue Crabi may have is the lack of documentation that often gets left out when drivers commit infractions due to the overall lack of accountability in Mexico, so it could be difficult for Crabi to determine exactly who is a safe driver and who is not. Just because someone has not received an infraction does not automatically make them a safe driver.
One thing is for certain is it will force existing insurance companies to step-up their game to compete with these new advanced technology services.
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