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Tesla vs. the Insurance Industry: how auto insurers can avoid the fate of the dinosaurs

Tesla vs the insurance industry | EasySend blog
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5 minutes

When it comes to innovation, Tesla is no stranger. The electric car manufacturer has disrupted the auto industry with cutting-edge technology and design. Now, it's set its sights on the insurance industry.

In the past, car insurance has been a necessary evil for drivers. But with Tesla's innovative approach to insurance, that is all changing.

So what exactly is Tesla doing differently?

Tesla Ecosystem

For starters, Tesla is offering insurance that is fully integrated with its cars. This means that drivers can get their insurance through Tesla, and the company will handle all the paperwork and claims.

Safety score-based premiums

What's more, Tesla's insurance rates are based on actual driving data rather than estimates. This means that drivers who drive safely will pay less for their insurance.

This is a major shift from the traditional insurance model, which relies on factors like age, gender, and zip code to determine rates. And it's one that could have a big impact on the industry as a whole.

It's hard to argue with a product that incentivizes safer driving at a lower cost to consumers. So far, Tesla's approach has been met with mixed results. Some drivers have seen their rates go up, while others have seen them go down. But regardless of the outcome, one thing is clear: Tesla is shaking things up and forcing the insurance industry to take notice.

A better customer experience

In addition to offering a more affordable and personalized product, Tesla is also providing a better customer experience.

For example, Tesla's insurance website is designed to be user-friendly and easy to navigate. And the company offers 24/7 customer support so that drivers can get help when they need it.

Tesla is also making it easier for drivers to file claims. With its integrated system, drivers can simply submit a photo of the damage, and Tesla will handle the rest. All of this is a stark contrast to the traditional insurance industry, which is often seen as slow to adapt and inflexible.

The other way Tesla is shaking things up is its digital-first approach to customer service. The company offers a self-service portal where customers can manage their policies and make changes online.

This is a stark contrast to the traditional insurance experience, which often involves lengthy phone calls and paperwork. By making it easy for customers to manage their policies online, Tesla is setting a new standard for customer service in the industry.

Telsa insurance customer experience | EasySend blog

The sign of what's coming

While Tesla is still a small player in the insurance market, its approach is a sign of things to come.

While data-driven pricing might still be a while away for most car manufacturers, fully digital customer service is clearly the future. In the meantime, Tesla is leading the way in terms of customer experience and customer service. And that's something that all insurers should take note of.

The bottom line is clear: you can't compete with a digital-first approach while still asking your customers to fill in clunky PDFs and paperwork. It is clear to everybody that things must change.

In order to compete with Tesla and other digital-first startups, insurers will need to embrace digital-first customer service. Those who don't may find themselves going the way of the dinosaurs.

How can insurers catch up?

1) Go digital: it is no longer enough to have a website. In order to compete, insurers must offer a fully digital experience that is easy to use and convenient for customers.

2) Use data to your advantage: Insurers have access to a wealth of data that can be used to create smarter, more customized products. By leveraging this data, insurers can better meet the needs of their customers.

3) Simplify the claims process: The traditional insurance claims process is long and complicated. In order to compete with Tesla, insurers must find ways to simplify and streamline the claims process.

4) Improve customer service: Tesla has set a new standard for customer service in the insurance industry. In order to compete, insurers must find ways to match or exceed Tesla's level of customer service.

Replacing PDFs with digital experiences - a must 

There is one area in the insurance industry that is clearly outdated: the way we collect customer data and signatures. Often customer data collection involves filling out lengthy PDFs. This process is not only time-consuming, but it's also prone to errors.

One thing is clear: In order to compete with Tesla, insurers must find ways to replace PDFs and paperwork with digital experiences.

Fortunately, there are new technologies that can replace these outdated processes.

There are several ways insurers can tackle this: take the traditional development route or embrace the no-code approach.

The traditional development route offers customization but is costly and time-consuming. It often involves building custom solutions from scratch or working with expensive third-party vendors.

The no-code approach, on the other hand, might be more limited in terms of what you can build, but it is much faster and more cost-effective. With no-code platforms like EasySend, insurers can quickly create digital experiences that replace clunky data intake methods such as PDFs and webforms.

If you are still asking your customers to fill in PDFs in 2022, you will be at a serious disadvantage. It is clear that insurers must embrace digital-first customer experiences if they want to stay competitive.

By embracing the no-code approach, insurers can quickly and easily create digital experiences that replace PDFs and paperwork. In doing so, they can better meet the needs of their customers and stay competitive in the market.

The future of insurance is digital, data-driven, and customer-centric. Those who embrace these changes will be the ones who succeed. Tesla has already shown us the way; it's time for the rest of the industry to follow suit.

Vera Smirnoff
Vera Smirnoff

Vera Smirnoff is the demand generation manager at EasySend. She covers digital transformation in insurance and banking and the latest trends in InsurTech and digital customer experience.