LEADERSHIP SPOTLIGHT: From Football to Funding Rounds, Kyle Nakatsuji of Clearcover 

LEADERSHIP SPOTLIGHT: From Football to Funding Rounds, Kyle Nakatsuji of Clearcover 
Kyle Nakatsuji is the dynamic CEO and Co-Founder of Clearcover - one of the fastest-growing auto-insurtech startups in the USA. We caught up with him to find out more.

It takes a particular kind of person to enter the entrepreneurial space and launch a successful startup. They must be ambitious, focussed, prepared to handle the knocks and the competition.

Another great trait for an entrepreneur to have is the ability to change direction when they realise the trajectory needs fixing. Formerly an attorney focused on tech startups, Kyle Nakatsuji also worked in strategy, finance, and legal roles with a number of tech companies. But he realised he needed to change career paths soon after graduation. 

His next venture led him to launching a startup that invested in insurtechs, and he was so attracted by the space, that he decided to launch his own company – Clearcover – a next-generation car insurance company providing fully digital solutions.

Founded in 2016, and now a unicorn, Clearcover has raised more than $480 million in funding to date – and was also recognised as a 2023 “Best Place to Work” by Built In, earlier this year. 

You’re known for being quite the entrepreneur. Can you tell us a bit about your background prior to Clearcover, and why you have an affinity for startups?

I never necessarily aspired to be an entrepreneur. I was an athlete my whole life, so I had an innate drive to compete. I played football as an undergrad at the University of Wisconsin, and then I eventually got an MBA at the same time I was earning my law degree from the University of Wisconsin-Madison. I worked as a corporate attorney right after graduating, and I learned pretty quickly that the legal field wasn’t my calling. 

I think the same characteristics that made me a good athlete– my competitiveness and willingness to take risks– aligned more with business than law. After spending some time with various founders, I dove headfirst into the world of venture capital. I co-founded American Family Ventures – the direct investing arm of American Family Insurance – where I spent more than four years investing in insurtech startups.

What prompted the decision to launch Clearcover? Is there a story there?

While I was working at American Family Ventures, I heard that my co-worker Derek Brigham was working on a side project that really piqued my interest. The idea of the project was to integrate insurance into other experiences and products to create more convenience and cost savings for the customer while lowering distribution costs. 

I was so invested in this concept that I went to my boss and asked if I could spend a portion of my time with Derek and his team to learn more about what they were working on. I just started nosy-ing my way into Derek’s meetings, unbeknownst to me that I never even really asked him if could. This is when we sparked the idea to start our own company, and we eventually got our partners at American Family Ventures to back us, which led to the official launch of Clearcover in 2016.

What differentiates Clearcover from the rest of the marketplace, and given the pace of change within the insurtech space, how can you maintain that sense of differentiation? 

The trend we see in the traditional insurance industry is that many legacy insurers are being forced to reinvent themselves by shifting their portfolio from analog to digital, which can be a very difficult, long process–especially given how quickly this industry shifts.

We have a head start. At Clearcover, we built a digital-first platform designed for digital customers from the very beginning. Therefore, we have a concentrated portfolio, which means we can run the business more efficiently than most others in the industry. As a customer, you can do everything you need to do with your car insurance policy, like make payments, file a claim, etc. all through the Clearcover app. As a partner or agent, you can leverage our technology to sell more business more efficiently. 

We strive to continue designing and building innovative processes that meet the same end goal: ensuring our customers receive hassle-free, affordable insurance. This means it’s critical to get real-time feedback from your customers. Knowing how they’re feeling about what you are doing is critical as the insurance industry changes and digitizes. Listen to their feedback, understand what they’re saying and where it is coming from – then turn what they want into action.

Clearcover Co-Founders Kyle Nakatsuji (Left) and Derek Brigham (Right)

As the CEO of a swiftly scaling company, what’s the sharpest learning curve you’ve experienced to date – and how did you deal with it? 

The steepest part of the learning curve has been taking the company through a few different phases of growth and recognising how that changes your role. As you move from the early stage to early growth and then to the growth stage, you evolve from player, to coach, to coach of coaches, to coach of coaches of coaches. Each of these “levels”  abstracts you further away from the actual work of the business and requires you to obtain and deploy a different set of skills.

Dealing with this has really been a combination of two things: 1) gathering knowledge and best practices from books, mentors, and learning from history, and 2) trial and error. It’s also important to frequently remind yourself of your real role in the company’s success. I keep my “job description” front and centre on my to-do list. It is:

  • Empower others by constantly communicating goals and the purpose/why then providing tools/frameworks to act. Think more, do less. Raise standards. 
  • Demand focus by challenging prioritisation, seeking leverage, and maintaining individual and organisational discipline.
  • Promote and Protect Values using repetition, mechanism development, and consistent reinforcement.

What’s the most challenging part about launching a new company?

The most challenging part is dealing with the uncertainty. Starting anything new is a tightrope walk – it’s nerve-wracking and requires serious focus and skill. The difference between starting a new company versus something inside of a larger business is the height of that tightrope.

In a startup, that rope is dangerously high, and a slight misstep could be the end of that walk altogether. Understanding that there is very little margin for error is both a source of constant stress and a startup’s greatest asset – it is the ultimate motivator.

Clearcover has been hailed as a ‘best workplaces’ company, by several, leading evaluators

Investment is tough right now for insurtechs, but your background is from the insurtech investment space. What strategies should new insurtech startups be using to attract investor interest?

The market is in a historically challenging place, but the key to success is the same as it has always been. There are no shortcuts – build a great business that can ultimately generate lots of value for customers and shareholders. There are many ways to do this, but no matter the “how” you pick, this is always the “what” that leads to success.

The market tends to overcorrect – it’s too high during high times and too low during low ones. Stay focused and remain steadfast in your approach to building long-term value while maintaining customer-centricity, and you’ll give yourself the best chance at achieving your goals.

AI is the big technology trend of 2023 – what’s your take on it? Should we be much tougher in terms of regulations, for example? And how is Clearcover utilizing AI?

Clearcover is a digital-first company. Our API platform has grown rapidly over the years, and by using advanced AI, we can operate more efficiently.  For instance, our claims experience, Clear Claims™, which is powered by our own proprietary machine learning technology known as ClearAI®, makes it possible for eligible claims to be paid quickly. The average is around 30 minutes but our company record is 7 minutes.

As an organisation, we have an internal governance committee and work closely with regulators to remain vigilant about the ongoing need to be attuned to the nuances, challenges and benefits of using this kind of innovative technology. Leaning into the opinions and advice of industry experts will ensure we are continuing to utilize AI responsibly, fairly and compliantly. 

What can we expect from Clearcover over the next 12 to 18 months?

We have an unofficial mascot, the “Rocket Turtle”,  that reminds us that each decision we make must support balanced growth – meaning we aren’t scaling too quickly or too slowly. In order to continue to achieve this steadily paced incline, we’ve focused on expanding our distribution channels. We’ve built an embedded digital insurance platform, powered by our own proprietary technology, to help our trusted partners and agents organically capture more customers during their shopping journeys. 

We launched our first embedded insurance solution with Experian last month. We are also focused on reimagining our agent experience, including creating a more innovative agent rewards program and revamping our agent resource center, which is now called the Clearcover Agent Hub. 

What inspires you in insurtech today?

I am inspired by the magnitude of the opportunity that still remains out there for customers and value creation. Market sentiment about the category will not change anything about what’s possible. The aphorism commonly used is, “Most people overestimate what they can do in one year and underestimate what they can do in ten years.” I think that’s true with people and with markets. I am as optimistic about the possibilities and opportunities we have today as I was when I started this journey and grateful for the team I get to work with each day to make it all happen.

Join Clearcover at Insurtech Insights USA 2023

Clearcover’s CEO and Co-Founder, Kyle Nakatsuji will be at Insurtech Insights USA 2023, on June 7th and 8th, at the Javits Center in New York. He will be taking part in the expert speakers panel: “A Look into the Crystal Ball: Navigating the P&C Insurance Value Chain of 2030”

Find out how you can attend Insurtech Insights USA 2023 here:

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