During Tesla’s recent Q1 2022 earnings call, Chief Executive Officer, Elon Musk, along with Chief Financial Officer, Zachary Kirkhorn, shared key details about Tesla’s new insurance offering that uses real-time driving behaviour data.
The insurance offering was launched earlier this week in Virginia, Colorado and Oregon.
During the call, Musk explained that having real-time feedback for driving habits is actually resulting in Tesla owners driving the cars in a safer way, because they are able to know whether these habits are affecting their insurance rate or not.
Musk stated that when people see the feedback they can see a real-time score, allowing them to realise that if they make the following changes in their driving habits, then they pay less in insurance.
Furthermore, Kirkhorn added that with the real-time data, they are trying to do a good thing for their customers, save people money, and make the roads a little bit safer.
Musk also explained during the call, that it’s a feedback loop for Tesla because they see if there is a crash, both large or small, and they get to see exactly what caused it, allowing them to then think about how they can change the design of the car or software in order to minimise the probability of that accident.
Musk said: “Most accidents are minor, but how do you have those accidents occur less frequently? And how do we make the repair associated with that accident super-fast? Like, aspirationally, it would be a same-day repair of a collision, which is night and day difference compared to sometimes having to wait for a month while insurance claims are settled and figured out – because Tesla is also doing collision repair.”
Kirkhorn added: “We do claims management in-house. And so, we receive the notification that there’s an accident, we work to prepare the estimate. And we can, with the support of our customers, use our collision centres to do the repair. And so, it’s full end-to-end visibility.”
He further explains that they can identify areas of cost inefficiency, and feed those back to their engineering teams or elsewhere, and software teams, and actually improve the product.
Kirkhorn said: “This lowers the cost of insurance, improves reliability of the product. So, it’s a full circle.”
Musk explains that this makes the customer experience “vastly better”, because if there is an accident, there is no argument.
“We’ll repair it immediately”, Musk said. “And this is as compared to arguing with an insurance company and then a claims adjuster and then a collision repair centre. And this can be a nightmare basically. So, we’re trying to turn a nightmare into a dream with Tesla Insurance.”
Also, during the call, Kirkhorn explained that whilst he was reading social media posts after Tesla launched the offering, he saw that a lot of people were reporting their stories of saving “quite substantial amounts of money”, relative to their previous insurance.
Kirkhorn explained that they are quite encouraged by that, and that they are working as quickly as they can to get to 80% of customers having access to a Tesla insurance product by the end of this year in the US, at which point they will then pivot their attention to expansion outside of the U.S.
Meanwhile, Moody’s recently stated that through Tesla’s insurance business which offers auto cover by using real-time driving data to assess accident risk, it is influencing technology firms to undercut traditional insurers.
Furthermore, in August 2020, Tesla opened up an insurance broker in Shanghai, China, which helped to broaden the company’s scope to its customers in Asia.