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Musk vs. Insurance
#cannabis #dogecoin #Mars #insurance
October 21, 2021
Within the past years, Elon Musk has made more buzz, than all the aliens with their crop circles ever. And now he approaches insurance with Tesla’s UBI based on the real-time driver behavior score. Nothing new under the sun, but good-old UBI.

Why is it worth attention?

Progressive was the first to adopt UBI 20 years ago. Their story is quite similar to what Tesla has done with EVs, and the world wonders if they can repeat the story with UBI.

Elon Musk must have been a crusader in his previous life, as now his initiatives start most of the Internet’s holy wars. And Tesla’s UBI is not an exception:

Some blame Tesla for an “imprecise score” that may result in inaccurate insurance pricing. It may be true, given that there are a few Teslas on the roads, so their ML might not be that sophisticated by now.
Others advise Musk to focus on his core business – vehicle manufacturing at scale – and only then give a step towards insurance. A well-grounded opinion, unless there’s the Easter egg – Tesla still produces fewer vehicles than any big OEM, yet has a cap higher than all of them together.
Of course, there are people who are excited to see Tesla tapping into the new niche and are sure that Musk will deliver another revolution. After a few attempts, of course.

Knowing insurance as a rather conservative industry, where high profits coexist with the lack of innovations, we are happy to see one more movement towards connected insurance.

But Tesla is not the first OEM in this field. You might have heard about the latest OEM UBI initiatives:

- Toyota Insurance – underwritten by Aioi Nissay Dowa Insurance;
- GMs Onstar Insurance – underwritten by AmFam;
- MovinX by Swiss Re and Daimler.

And now we see Tesla joining the game.
tesla, connected car, UBI, insurance
If the insurance industry was waiting for a sign to start changing, one guy has just drawn it on their field.
It is quite unusual to see Tesla not creating the product from scratch, but rolling out the close copy of existing ones. Though we bet that with its appearance in the domain, we can expect a higher innovation pace in the industry.

And we should say to Musk, “thank you in advance for this, whatever Tesla UBI looks like in the future.” Maybe one day Tesla will pivot from the MGA model into the Insurer itself to compete with giants like Progressive, Liberty, Geico, and State Farm.

What else do we have to say?

While everybody is competing in the B2C mobility segment, commercial lines are still intact. Considering that the B2C market is shrinking and commercial lines will dominate the market by the end of the decade, now is the best time to start adopting telematics for fleet insurance. And we can do it. There are only two questions left:

1. Did Jeff Bezos wait for Elon to go to Space?
2. Then why do we do it in insurance?

He succeeded, and we will. Follow us on LinkedIn to be near when the insurance revolution happens or message us here if you have any ideas of how to anticipate the moment.
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