His final words on an earnings conference call that lasted more than an hour came as Musk and Chief Financial Officer Zachary Kirkhorn answered an analyst’s question about profit margins and underwriting rates for the electric vehicle manufacturer’s insurance program.

Kirkhorn said it was too early to share details on the insurance program’s financial results. Instead, he focused his remarks on domestic and global expansion plans and the idea that Tesla Insurance is making America’s roads safer where they are available today. Next, Musk chimed in with remarks on how Tesla is improving the complaints-handling experience for customers.

Kirkhorn said Tesla expects to be the largest insurer of Teslas in the state of Texas by the end of the year. In addition to expanding its “real-time insurance” offering to Virginia, Colorado and Oregon this week, Tesla Insurance is working to give 80% of U.S. customers access to a Tesla Insurance product. by the end of 2022, he added.

After that, “we will focus our attention on expanding outside of the United States,” the CFO said.

Currently, Tesla Insurance is available in eight states, including the three added this week.

“With these three new states, the model is different because we are now the underwriter, and we also own the risk,” said Kirkhorn, an MGA model opponent. In those states, “we are a fully vertically integrated insurance provider from systems and finance,” he said.

Referring to other states, Kirkhorn said, “Texas is our oldest real-time insurance market.”

California is one of eight states where Tesla Insurance is available, but policies issued in California do not include real-time driving behavior in the calculation of insurance premiums. (Related Insurance Journal article, “Tesla’s Musk Tweets Off on California Regulator Lara Over Car Insurance”)

Tesla Real-Time Assurance

In seven states where Tesla coverage is now available, the automaker offers “insurance using real-time driving behavior.”

A key factor in determining real-time insurance premiums is a Tesla Safety Score – essentially, a score that captures the insured’s driving safety by monitoring forward collision warnings every 1,000 miles, braking abrupt, aggressive turns, dangerous follow-up time and forced disengagement of the autopilot. (a measure of inattention while using Tesla’s advanced Autopilot driver assistance system).

While rewards are based on a mile-weighted average of daily safety scores over the past 30 days, drivers get real-time insights into their driving behaviors at the end of each trip, and their safety score. security will be updated.

“Based on changes to your Safe Score, you’ll see an estimate of your next bounty in real time,” the website says.

Other factors included in the Tesla Insurance premium calculation are vehicle model, policyholder address, miles driven, and coverage selected.

Related Article: Tesla, Other Automakers Have Advantage Over Incumbent Insurers: Moody’s

It’s the real-time element of premium calculation that got Kirkhorn and Musk talking about “passions” and “dreams,” which transcend the top and bottom lines of insurance operations.

“It’s become a real passion program for us… It’s more important than the economy. We’re trying to do a good thing here for our customers, to save money and make the roads a little safer,” Kirkhorn said, after noting some buzz on social media from customers of Virginia, Colorado and Oregon who say they saved money by switching to Tesla Insurance.

“Having real-time feedback on driving habits actually allows Tesla owners to drive the cars more safely,” Musk said. “They get real-time feedback on, OK, does it affect my insurance rate or it doesn’t. And so when people see it – they can see a real-time score – they realize , oh, if I make the following changes to my driving habits, then I pay less in insurance,” he said, referring to a “real-time feedback loop for driving” and the incentive to safer driving created by the pricing model.

There’s not just a feedback loop for drivers, but also for Tesla “because we see if there’s an accident, big or small…exactly what it costs. And then we think about how we can change the design of the car or the software to minimize the likelihood of this accident.

“Most accidents are minor, but how do you make these accidents happen less frequently? ” He continued. “And how can we make the repair associated with this accident super fast?”

“Aspiringly, it would be like a same-day collision repair, which is a day and night difference from sometimes having to wait a month while insurance claims are settled and calculated, because Tesla also does collision repair,” Musk said.

“It just improves overall macroeconomic efficiency,” he said.

Kirkhorn explained: “We handle claims internally. And so, we get the notification that there is an accident; we are working on the preparation of the estimate. Then we can, with the support of our customers, use our collision centers to carry out the repair. »

“So it’s total end-to-end visibility. And [with] all of this, according to Elon, we can then identify areas of cost inefficiencies, refer them to our engineering [and] software teams [to] actually improve the product,” he said, referring to Tesla cars. “It reduces the cost of insurance, improves the reliability of the product. So it’s a full circle.

Musk added, “Fundamentally, the customer experience is just so much better because if there’s an accident, there’s no discussion. We will fix it immediately. And that’s versus having an argument with an insurance company, then an adjuster, then a collision repair center.

“It can be a nightmare basically. So we are trying to turn a nightmare into a dream with Tesla Insurance,” he said.

Source: UK timenews