Challenges and opportunities facing electric vehicle insurers

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In the latest episode of the Insurance Post Podcast, titled Challenges and opportunities facing electric vehicle insurers, Distefano said entering the UK insurance industry makes sense for Tesla given the volume of driving data the manufacturer has access to.

Distefano said: “Tesla is dominating the UK market. What I am more interested in is how the [insurance] industry will respond to this. Challenge and competition drive innovation. We’ve got to think about the customer. Just look at the banking sector after the rise of fintech.

"I welcome the kind of stimulation that Tesla’s positioning provides the market.

"Insurance, as an industry, has access to a wealth of data and it is about time [that] we started to think differently about how we use the data to enhance the customer experience and our offerings.”

Distefano, who spoke at Insurance Post’s Motor & Mobility event at Mercedes Benz World in Weybridge, Surrey on 13 June, added: “I wish Tesla great success. As car technology evolves quickly and becomes more available, I think insurers will be well positioned to compete as we move forward.”

His views were supported by fellow podcast guest Kevin Ryan, senior industry analyst for insurance at Bloomberg Intelligence, who said that whatever Tesla gets round to doing in the UK will be supported by the insurance sector.

Ryan explained: “If you are into making cars in China you aren’t into underwriting in the UK or anywhere else. They are going to have to have a dialogue with the industry. They will also buy a lot of reinsurance when they get going, I suspect.

“They will have help and that will enable the industry to have a good look through what they are doing, and right now get some expensive risks off the book if they come along and take a large chunk of that business.”

Repair network

Kieran Fisher, leader of the ongoing development of Percayso’s vehicle data insight proposition, said most Teslas on the road today are less than five years old and, if they are in need of repair, they go to an approved repairer.

As Teslas become more mass market, Fisher said if the manufacturer wants to keep everything within the company’s own repair network that is going to push costs up and insurance costs up.

Fisher said: “I still think there is scope there for mass market, for people to shop around, and some fair competition.”

The trio, who are joined by Niall Edwards, partner of law firm Kennedys, also examine cover for the growing number of electric vehicle motorists, what is driving EV claims inflation plus how insurers and manufacturers are working together to understand driver behaviour and price policies accordingly.

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