Clearcover Car Insurance seems to have been expressly designed for a COVID-19 landscape: Its policy holders can handle nearly every claim – not just every premium payment or coverage change – virtually. The Chicago-based company has stolen a march on the market by doing Esurance and other internet-milieu insurers one better.
Clearcover is a fast-growing enterprise disrupting an industry that already had been experiencing profound disruption for a quarter-century or more. It provides car insurance online to consumers who dwell online and wouldn’t know a local insurance office if the agent camped in their living room.
Founder and CEO Kyle Nakatsuji started the venture-capital operation at insurer American Family in Madison, Wisconsin, and launching Clearcover was a logical next step. “We were spending a lot of our time looking at insurance and the technology landscape and figuring out what to invest in,” he said. “So I decided to start one of my own” with American Family’s blessing.
His approach was to go one better than notable online outfits such as Esurance by designing the whole process of shopping for and purchasing insurance to occur seamlessly and completely within the context of e-commerce.
“We built technology that allows us to streamline quoting and the sale process based on data we can acquire,” Nakatsuji told me. “It’s also based on how we formulate questions. And we selected marketing partners who are relevant to people, as opposed to buying Super Bowl ads,” he said, in an oblique reference to insurers such as Esurance that have taken the Big Game-commercial route.
At the same time, Clearcover built even its claims process to be digital to a level unparalleled in the industry: 96 percent of claims are handled completely virtually. “Consumers get settlements faster,” Nakatsuji said, “and it’s less expensive for us.” And in the pandemic era, less physical interaction among any of the parties to a claim is a bonus.
Interestingly, Clearcover took this digital leap in downtown Chicago, not in any of the obvious places like Boston, New York, San Francisco or Seattle. The key — besides Nakatsuji’s Midwestern roots in Wisconsin and appreciation for the digital chops of his fellow residents — lay in the fact that much of the traditional insurance industry essentially grew up and still resides in Chicagoland.
“We had a choice where to locate” Clearcover, Nakatsuji emphasized. “We went through an analysis and tried to find the best overlap between a market where we could find world-class tech talent, great insurance talent and where we could raise a lot of capital. “It boiled down to Chicago and the coasts, and Chicago won on better access to all the insurance talent from Allstate, State Farm, Kemper, Aon and other insurance companies here. Not to mention that elsewhere in the Midwest are great insurance companies such as Progressive and Nationwide, in Ohio.”
Clearcover also has committed to expanding in the Midwest, planning a second employment center in Michigan for “virtual jobs” in customer experience and claims. Nakatsuji said the company will prioritize hiring of Detroiters for up to 300 jobs, making the city a “second hub” for the company.