Tesla already bundles insurance for customers and if nothing else Elon Musk is a proven innovator. Then you read his strategy to build 1 million "ROBOTAXIS" in the near future. Well- if not Tesla then Volkswagen, Toyota, GM amongst many planning to unleash EVs and fleets of autonomous vehicles.
Basic manufacturing is a challenge that Tesla constantly struggles with together with cash-flow. Not long ago Google might have acquired Tesla so imagine another scenario where Apple does so. Software, manufacturing, cash and a world-wide potential customer base.
This leads me to Ecosystems and incumbent insurance companies. As the latter look more to services and prevention rather than cure in business models which ecosystems do they seek to lead? And will they have the talent, resources and vision + strategy to succeed?
It is not a foregone conclusion that they will. It takes them out of current comfort zones in direct competition with systems integrators, OEMs, the GAFA group.
The one million robotaxis will be owned by a combination of ride-share companies, auto manufacturers, Ubers & Lyfts of this world, even GAFAs.
How will they be insured and by which enterprises? Which combinations of companies will form the leading ecosystems and will insurers be leaders or followers? Value-add partners or commodity suppliers?
In "Lessons from Ping An" the key lesson is data and AI are the competencies to conquer. Yet insurers only access about 20% of the data they store today which means that analytics and forecasting are seriously limited. They seriously under-estimate the resources and other technology skills required to master data and deploy AI effectively. They must conquer this challenge before aspiring to be ecosystem leaders.
The 1 million robotaxis will generate the data, massive volumes, and who owns that data- The insurer? Not by natural right nor commercial might. Who owns the other relevant data about customers?
- Ping An
- The insurer
Insurers trail in this list and yet must be able to access and use that data to deliver value. As autos evolve to the autonomous model, become ever more reliable and safe, are consumed as services rather than ownership who maintains and repairs these fleets?
Today a major insurer can insure and manage the vehicle recall program for a major auto manufacturer. The warranty, triaging of services to keep the customer mobile and provide medical care, and management of the repair network chain. What stops them from evolving into the insurer of vehicles, passengers and repair/maintenance?
Or is that more of a supply chain focus? Altus Consulting recently mapped the digital and supply chain footprint of Amazon and shows how much of the insurance value chain it covers. Amazon Claims Management Opportunity .
Whilst it focuses on home insurance it is not a stretch of the imagination to apply to auto insurance.
McKinsey recently published "Claims 2030 - Dream or Reality". Much of the technology it describes can be implemented today but the strategy challenges and opportunities are those that must be plotted now and implemented by 2030; not too far away. I think insurers ponder too much on technology strategy and delay action as a result of believing themselves constrained by legacy technology. In fact technology partners like 360Globalnet and Snapsheet already deploy the technology not as insurtech start-ups but as scale-up partners with major customers.
The technology can be actioned today but the overall strategy will take longer but needs planning now. Which non-insurance disrupters are lining up carriers in their sights?
Nigel Walsh, in one of many thought-provoking articles discusses services and insurance in "We may have lots of InsurTech Ingredients, but we really just want cake!"
As an insurer make sure you don't just end up with the breadcrumbs. Be the master Digital Baker with a full service offer.
When asked during a Wednesday earnings call if Tesla is considering launching an insurance program, Musk says the company is working on one. "The answer is yes we are creating a Tesla insurance product and we hope to launch that in about a month. It will be much more compelling than anything else out there," he said.