If there’s one brand that insurers might reasonably wish to be associated with, it is Tesla’s. Tesla owners love the brand with an almost cult-like intensity, awarding it a stratospheric net promoter score of 97. 8 Tesla’s insurance business has grown rapidly since its launch in 2020. In 2022, Tesla Insurance Services underwrote $242.9 million, up from $111.7 million in 2021. Reinsurers were able to participate in this business because Tesla Insurance Services is a managing general agent (MGA), writing business through fronting companies backed by numerous reinsurers. In 2022, Tesla also wrote $12.7 million for the account of its own insurance company. A cautionary tale from Texas
It seems, however, unlikely that Tesla’s policyholders would award it anything close to a 97 rating as an insurer. In November 2023, Reuters published an extensive investigation of the claims experience of Tesla policyholders, finding that “understaffing left some customers waiting weeks or months for compensation as they continued making payments on crashed cars.” 9 Service issues had generated scores of complaints on social media, Reuters reported. Insurance is sometimes described as a simple business that is hard to execute. Claims service can prove the Achilles heel of less experienced practitioners.
8. https://customergauge.com/benchmarks/blog/tesla-nps-score 9. “Tesla launched its own car insurance. These drivers say it’s a lemon.” Reuters Special Report, November 21, 2023
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