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Is this actually Tesla running their own insurance company or just Tesla selling Tesla branded insurance backed by an existing insurance company.

• elijahlito 7y ago
  The latter: "the California Department of Insurance website showed Tesla was licensed as a broker to conduct business on behalf of the State National Insurance Company Inc" (https://www.reuters.com/article/us-tesla-markel-insurance/tesla-rolls-out-insurance-in-california-idUSKCN1VI2QZ https://www.reuters.com/article/us-tesla-markel-insurance/te...)
  • phonon 7y ago
    State National is what's known as a "fronting company" in the insurance industry. Tesla is acting in far larger role than a retail broker.
• echadwickb 7y ago
  From the rate filings available from the CA DOI page[1], it appears they are being "fronted" by State National Insurance Co (recently acquired by Merkel[2]). "Fronting" is a new concept to me, but seems to be a special type of re-insurance[3]. 1. https://interactive.web.insurance.ca.gov/warff/front https://interactive.web.insurance.ca.gov/warff/front 2. https://www.insurancejournal.com/news/national/2019/05/02/525317.htm https://www.insurancejournal.com/news/national/2019/05/02/52... 3. https://www.captive.com/news/2018/11/12/what-is-fronting-arrangement-why-do-captive-insurers-use-them https://www.captive.com/news/2018/11/12/what-is-fronting-arr...
  • phonon 7y ago
    Markel, not Merkel. No, fronting is not reinsurance. It's basically a licensed insurance company that is "leasing out" its license/assisting in regulatory/filing matters for a small percentage of the premium. Tesla doesn't want to set up an actual insurance company, so it's easier to reuse an existing one. Almost certainly there is a reinsurer involved as well (that hasn't been publicly disclosed), as Tesla likely doesn't have excess capital available to fund the surplus requirements for this auto insurance line. https://www.insurancejournal.com/news/national/2019/05/02/525317.htm https://www.insurancejournal.com/news/national/2019/05/02/52...