Detroit could soon be home to 300 new jobs in the auto insurance industry as a Chicago-based carrier seeks to expand its Midwest footprint.
The board of the Michigan Strategic Fund on Tuesday awarded Clearcover Inc. a $3.5 million Michigan Business Development Program grant and a $400,000 Jobs Ready Michigan Program grant.
The company plans to invest up to $5 million and create up to 303 jobs in Detroit, according to a memo from the Michigan Economic Development Corp., which administers the MSF.
Because of the coronavirus pandemic, Clearcover intends to begin hiring immediately for remote work-from-home positions in sales, claims and customer service in the Detroit labor market, said Heidi Craun, head of customer experience at Clearcover.
“We strongly prefer to have teams together in an office,” Craun told the MSF board during a virtual meeting. “Of course, that was kind of blown up by the pandemic.”
Its Chicago headquarters is located in the city’s downtown central business district.
Clearcover is still finalizing office space, according to an MEDC spokesperson. Co-founder and COO Derek Brigham said the company would lease office space in downtown Detroit “once things become safe and people are comfortable working together in an office.”
Clearcover is a technology-based auto insurance startup founded in 2016. The company is backed by investments from American Family Insurance Co., Cox Enterprises Inc. and OMERS Ventures, the multi-stage investment arm of the Ontario Municipal Employees Retirement System, Brigham said.
The insurance carrier is setting up a customer service office in Detroit, but not yet entering Michigan’s auto insurance market. The company is in the early stages of becoming licensed to sell auto insurance in Michigan, Brigham said.
Will Butler, senior business development manager at the Detroit Regional Partnership, said Clearcover’s decision to choose Detroit over other Midwest cities is an “important validator” for Detroit’s growing fintech industry.
“This project checks a lot of boxes that we’re looking for when we try to attract high-quality companies to attract to the city,” David White, director of national and regional business attraction for the Detroit Economic Growth Corp., told the MSF board.
Other taxpayer incentives for Clearcover to set up shop in Detroit include a personal property tax abatement to offset the cost of leasing office space downtown and a $750,000 cash grant from the Downtown Development Authority that will be tied to job creation, White said.
Clearcover’s average wages in Detroit will be $59,000, plus fringe benefits that include a 3 percent employer contribution to 401(k) retirement accounts and equity options for stakes in the company, Craun said.
Clearcover’s Detroit Customer Experience Center will mostly operate with employees working in a variety of business functions such as claims and underwriting.
“The Company will seek prospective employees with critical thinking skills who can thrive in a fast-paced environment,” according to the MEDC memo. “A four-year degree is not required for any of the roles; however, each prospective candidate will need to demonstrate strong aptitude and work ethic to be considered. The Company is committed to hiring qualified Detroiters.”
Clearcover plans to work with Detroit at Work and the DEGC to identify qualified candidates.
Additionally, the company may seek to locate software engineering roles in its Detroit office in the future, the MEDC memo states.
The MEDC memo says the Jobs Ready grant will help the company with various human resources needs tied to recruiting, training and diversity training, while the MBDP funds will offset the company’s near-term capital investment costs.
“The company believes a Michigan location offers a strong talent pool to fill its high-wage positions and believes that a market like Detroit can amplify its branding better than the competing markets,” the MEDC memo reads. “While the Company continues to express its desire to locate in Detroit, incentive assistance is necessary to help offset the financial disadvantage of locating in Michigan.”