Innovation Meets Protection: Insurtech, Ally for SME Logistics

Q: Why did the company choose Mexico as a second destination to open offices? 
A: There were two main reasons. First, we started the business in January 2021 with a division called ZURU, which was an e-commerce platform for small and medium-sized importers and exporters. Unfortunately, the platform did not gain traction due to the political impact of a new president in Peru halfway through the year. This significantly damaged the foreign trade sector and affected both investors and founders.

We had gathered enough data to confirm that there was a strong appetite among SMEs to be able to quickly insure their cargo 24/7. To eliminate the external factors affecting the business, we decided to search for a new country. We started looking into others in the region, where      we identified a healthy competition among insurers and a willingness to invest in technology and collaborate with the insurtech ecosystem. Through certain connections, we managed to reach out to two insurers in Mexico that had the capability we were looking for. 

We also considered the nearshoring trend happening in Mexico, which led to a significant increase in logistics operations, creating a potential client base 10 times larger than what we had in Peru. We decided to first seek support from insurers in Mexico and one of them was Chubb, a leading insurer in the country. 

Q: How is your alliance with Chubb going to strengthen your position in the market? 
A: Chubb had a strong interest in working with an insurtech that was not solely focused on personal lines of insurance. They wanted to enter the SME segment, specifically targeting the commercial rather than the corporate sector. Our value proposition featured the technology to connect our platform with Chubb’s to reach that specific market. Everything happened to align perfectly as Chubb had invested a significant amount of money in its transportation-related APIs, which was a fortunate coincidence. Chubb played a crucial role in ZURU, undoubtedly being the first insurer to trust and support us greatly.

We are exploring opportunities in Central and South America. Chubb has the capacity to operate in Colombia, Peru, Brazil and Chile and we are actively looking for potential clients in these countries. Towards the end of 2022, we established a second commercial division with HDI Global. This is the third-largest reinsurance group in the world and we structured a business model with them that we refer to as a SaaS platform with an embedded product. This allows logistics operators to log into our platform with a username and a password to provide real-time logistics insurance to their clients. 

Q: What are the main challenges for SMEs to adopt insurtech solutions? 
A: One of the main problems we encountered is that SMEs have limited access to cargo insurance at a low cost. For instance, for a cargo worth US$100,000, companies have to pay around US$200, which is a minimal amount compared to their investment. However, when they go through the traditional method of using a broker, it could take days or even weeks to get a quote and issue a policy for a simple shipment. So, our first goal is to create a product that provides SMEs with easy access and convenience.

Another significant issue was that 100% of the insurers in the region offered an annual forecast policy. This means they would ask SMEs how much they planned to import or export for the year to calculate their rates. However, insurers required SMEs to pay the full premium upfront, which became impossible for many during the COVID-19 pandemic when ports were closed.      Our model tackles this problem by giving SMEs the ability to insure their shipments on-demand, aligning better with their cash flow. It is a real-time process, allowing them to insure their cargo anytime. By addressing these two main issues - accessibility and breaking away from the traditional annual policy model - we provide SMEs with flexibility and better management of their insurance needs.

We also established a division called “Digital Partners," with a dedicated team focused on companies within the logistics ecosystem, including importers, digital freight forwarders and transporters, as long as they have a strong tech foundation. Through API integration, we connect their systems with ours, allowing seamless migration of their data and enabling policy issuance through our connections with insurers. This division was formally launched in June and has attracted significant interest from major digital logistics players in Mexico.  

Q: What are the main areas of opportunity for the Mexican logistics sector?  How can ZURU help to address them? 
A: Managing cargo and negotiating with transporters are still largely managed by traditional methods due to the low level of digitalization in the industry, insurance falls into the latter category, which is why about 90% of daily operations is uninsured or underinsured. Our focus is on distributing and/or purchasing cargo insurance quickly. 

Our future vision goes beyond cargo insurance alone. We are building an ecosystem of SMEs that we are confident will seek insurance solutions for other types of risks, such as warehouse, office/business, liability, last mile and container insurance. These are the upcoming products that we plan to add to our platform. 

Q: What are the main advantages of acquiring insurance via an insurtech?  
A: If you approach an insurance company directly, they may not serve you as an SME due to the higher hourly cost of operation. In the same vein, if a broker does not have the technology, the quoting and issuing process could take days or even weeks. 

In contrast, we provide our clients with excellent self-service options. Our clients can access our platform, autonomously learn about the process and make their purchases. Additionally, we offer the option of being able to purchase insurance on a per-shipment basis, which may not be available directly from the insurance company. These advantages allow our customers to buy quickly at a favorable cost. 

I can proudly say that we currently offer the best prices in the market. For SMEs, it is a great advantage to purchase coverage at a relatively economical premium, covering risks such as cargo theft and accidents during transportation and unloading, which are the primary risks associated with cargo.

Q: How fast is the insurtech sector growing in Latin America? 
A: The insurtech sector has the least invested capital at a regional level: less than 5% of the investment money is allocated to insurtechs. However, as we entered the Mexican market, we discovered a large ecosystem. We are members of the Mexican Insurtech Association and, to this day, there are over 50 members. In Peru, the number does not exceed five insurtechs and there is no association. 

Mexico is one of the key players driving the insurtech segment, particularly in personal and business insurance. Another strong market is Colombia, followed by Chile. These three countries are experiencing significant growth of digital platforms in the insurance industry. Unfortunately, insurance is not as “sexy” as other sectors, such as fintech, which experiences almost automatic demand. However, insurtech works hand in hand with the financial world. It makes sense that, as fintech companies grow, the insurtech segment should also experience relatively similar growth rates. 

Q: What are the main challenges for insurtech companies in Mexico and the region? 
A: The first challenge lies in the limited technological capabilities of insurance companies. There are very few insurers that possess strong tech capabilities. Additionally, there is a need to change the mindset of insurance companies regarding what it means to work with an insurtech. Insurtechs are not like traditional brokers and should not be treated as such. They are highly agile digital partners that can change strategies and propose new ideas on a day-to-day basis, unlike brokers who tend to be more passive.  

Creating an ecosystem of partnerships is also crucial. In Mexico, we work with many allies from other technological sectors such as fintech, logtech and transportation platforms. We have found a strong collaborative effort in these partnerships, whereas, in other countries, there might be some resistance. In Mexico, we find a highly positive collaborative working environment, which is why our current focus is on Mexico. 

Access to venture capital is also challenging. When you mention insurtech to venture capitalists, they often think it is about fintech. The segment is changing its way of thinking about how to approach funding. In May 2022, we closed our pre-seed funding round with a Mexican venture capital fund, which is a very positive development for us. The resources will be used for the development of our commercial team in Mexico, as well as investing in technology. While we have a strong technological foundation, each adaptation and negotiation with different partners presents unique nuances. Our two main areas of investment are technology and commercial growth.

We have a team of 40 people. Although we operate in two countries, our team size is relatively small. This sets us apart from the typical startup environment, as startups often experience rapid growth in terms of volume. We are cautious and deliberate in how we invest each dollar.

Q: What were the lessons learned from being listed in Forbes’ 100 best startups from Peru?
A: We were the only insurtech among the top companies, which demonstrates the lack of insurtech presence in Peru. Being nominated and recognized by reputable organizations, such as Forbes, validates the efforts we have put into our company. Peru may not be a prominent country in terms of the startup ecosystem, as it is still relatively small. However, as founders and a team, we are proud to be the first insurtech to emerge from Peru and generate significant attention in the region. 
 
Part of this success was possible because of our inter-generational team, comprising individuals from different age groups, including those in their 30s, 40s, 50s and even 60s. This diverse mix of generations allowed us to benefit from a wealth of experience, expertise and insights, enabling us to overcome challenges and achieve positive results in our business endeavors.   

Q: From ZURU’s perspective, what are the main trends emerging in the Mexican logistics sector? 
A: There is a strong trend emerging in the field of artificial intelligence (AI). AI is a significant development for us, having already been implemented to automate processes. This trend is highly relevant in the logistics sector, particularly as it undergoes a digital transformation in international trade. Our challenge as startups is to promote the benefits of these advancements and change the mindset of SMEs and current logistics practices.   

Q: What are the company's goals for the near and long term?  
A: In the short term, our goal is to consolidate our operations in major cities. Currently, we are primarily focused on Mexico City, but in the coming months, we will establish a presence in Guadalajara and Monterrey.

In the long term, Mexico will play a vital role in our operation. We aim to leverage the nearshoring opportunities with the US, our third target market albeit only among Spanish-speaking clients. It is an ambitious goal and we believe that without Mexico, it would not be possible. 

Speaking of nearshoring, this phenomenon will bring a large volume of goods and new plants, which will require transportation. This will lead to the creation of numerous transportation divisions, including the railway sector, which we are exploring to see how we can help to mitigate risks. The nearshoring trend represents a substantial volume, with an impact that extends beyond ZURU and affects all players within the supply chain. 


ZURU Latam is an insurtech based in Peru that provides a digital platform for logistics insurance for SMEs. It also provides SaaS with embedded insurance for logistics operators and API integration for digital partners.