Tesla has brought on board a 20-year veteran executive from GEICO to attempt to tackle the high insurance premiums associated with its electric vehicles.
The automaker has been striving for years to roll out both its own insurance solutions and partnerships to combat the typically high premiums Tesla owners face. Although it recently achieved nearly half a billion in premiums, it is not a profitable venture for the car maker.
While Tesla has successfully reduced the prices of its vehicles over the past five years, ancillary costs like interest payments and insurance have remained steep. Lowering these expenses, Tesla believes, will boost demand for its cars.
Initially, Tesla launched insurance products in collaboration with established insurers. In 2019, the company introduced its own insurance offering in California, although it did not initially incorporate real-time driving data or Tesla’s safety score, which was the ultimate objective.
Before expanding its insurance to other regions, Tesla focused on developing its safety score system. This system uses real-time driving data from Tesla vehicles to assess drivers’ behavior based on metrics such as “Forward Collision Warnings,” hard braking, aggressive turning, unsafe following distances, and forced Autopilot disengagements.
By October 2021, Tesla rolled out a new insurance product in Texas, utilizing the safety score, and has since expanded it to numerous states. The product has stirred some controversy, as the reliance on real-time data for pricing, contrasted with the playful performance of Tesla vehicles, doesn’t suit every driver.
Now, Allen Laben, a 20-year veteran from GEICO, has joined Tesla in what appears to be a bid to deal with the premium costs associated with its cars. Laben previously served as the ‘director of claims specialty operations’ at GEICO and has held various executive and managerial roles throughout his tenure.
Laben confirmed on LinkedIn that he had taken on the role of ‘head of insurance partnerships’ at Tesla. He posted on LinkedIn:
My goal is to make Tesla vehicles easy and economical to insure. By partnering with insurance companies, teams across Tesla, and collision shops in the USA and Canada, we’ll lower the total cost of Tesla ownership and accelerate the world’s transition to sustainable energy.
This indicates that Tesla will continue to work with other insurance companies for the time being (like its current fronting arrangement with State National), rather than solely relying on its own insurance products.
