Tesla, Markel partner on car insurancePosted On: May. 2, 2019 10:56 AM CST
Tesla Inc. plans to provide personal car insurance to its drivers with a Markel Corp. unit acting as a fronting insurer.
The plan was discussed briefly Wednesday by Markel Corp. co-CEO and director Richard Whitt during the insurer’s earnings call Wednesday.
Mr. Whitt said in response to a question that Markel unit State National Insurance Co. provides “the plumbing to move risk to capital … they are quite honestly the best in the business in terms of offering that fronted model.”
Mr. Whitt said State National is not retaining any of the business, which is being ceded to Tesla’s “risk-taking partner,” which he did not identify.
Mr. Whitt said he does not want to say any more than that because Tesla and its partners “have many things they probably want to say about the arrangement. We were just happy that we could step in at State National and assist them in what they were trying to do.”
“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,” Tesla CEO Elon Musk said during his company’s earnings call last week.
State National’s application to the California Insurance Department’s rate regulation division was approved April 9.
Tesla and Markel did not respond to requests for additional comment.
A U.S. Securities and Exchange commissioner on Tuesday criticized a settlement between the regulator and Tesla Inc. CEO Elon Musk over his use of Twitter.