Moscow, may 6 — “Conduct. Economy” At the last meeting of shareholders of Tesla Elon Musk said that the company will soon introduce a new service — car insurance. American billionaire Warren Buffett in an interview with CNBC explained why this was a bad idea.
It is known that Tesla shares information with insurance companies about how the system works Autopilot. Through this system it is planned to reduce the tariff on car insurance. While Musk did not provide further information on what will be an insurance policy.
“Because next month we will launch its own insurance product, we will include this information in the insurance rates,” said Musk. Data will be analyzed in the automatic mode, the characteristics and driving habits this will depend on the insurance rate.
“If customers want to buy insurance Tesla, they may have to agree “not to drive like crazy,” said Musk, adding that otherwise, they’d get a higher insurance rate. Companies such as insurance startup as Root, have introduced programs that give Tesla owners a discount if their electric vehicle equipped with an autopilot.
Warren Buffett believes that Tesla will face challenges in the insurance business, where booming private investment Fund Buffett. Holding company Berkshire Hathaway is engaged in the investment, insurance and reinsurance. The holding includes GEICO — headquarters is located in Chevy chase (Maryland), performs all types of insurance in all States; the main focus is car insurance, in this market, the company ranked second in the USA with a share of 12.8%; insurance premium — $29 billion
“It’s a difficult situation,” said Buffett to the shareholders at the annual meeting of Berkshire Hathaway. “The success of automotive companies in the insurance business, probably the same as the success of insurance companies in the car business”. Buffett, however, had previously supported the Progressive insurance company with the lion’s share of the emerging market, has 1.6 million customers in its UBI program.
This segment of the insurance industry currently represents a relatively small 1.1 percent of the insurance market. However, many insurance companies follow a profitable way Progressive, including Allstate, State Farm, Zurich, Liberty Mutual and others. The turning point in this trend, insurance is expected in a year or year and a half.
However, Warren Buffett may be wrong about Tesla’s ambitions in the insurance business, he was wrong about investing in Amazon. This billionaire recently confessed in an interview with CNBC. In the past, Buffett spoke well of CEO Amazon Jeff Bezosa, and called his mistake that is not invested in the online retailer’s early activities Amazon.
“I was an idiot that didn’t buy Amazon shares,” said he. Exactly how much Berkshire Hathaway invested in Amazon, Buffett did not elaborate, noting that the company will reveal it later in the quarterly report. Last year, Amazon became the second American company, with the capitalization has reached $1 trillion.
Recently it became known that Berkshire Hathaway Inc. acquired an interest in Amazon.com Inc. “I was very, very, very high opinion of the abilities of Jeff Bezos, when I first met him, and yet I underestimated him,” — said Buffett at the annual meeting of shareholders last year. However, the decision to sell shares in Amazon took now not he, but one of the investment managers. We are talking about Todd Combs, or Ted Wexler, Reuters reports.
Buffett has long avoided investments in technology companies, saying that he does not understand this market. The exception he made for IBM, giving the company $10 billion in 2011, but this investment failed and the billionaire has sold almost all the papers IBM in 2018.
Shares of Apple, Berkshire acquired only in 2016 and eventually increased its stake in the iPhone maker to $50 billion Value of shares in Amazon jumped 27% since the beginning of 2019.
Berkshire will publish information about their assets at the end of the first quarter of 2019 later this month.
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