Many actuaries think that private health insurance will go away soon, but I think that auto insurance actuaries will be hit far sooner than health insurance.
Health insurance companies are not really insurance companies; they are tools by doctors and hospitals to shift the blame on overpriced healthcare. Powerful people will never allow health insurance companies to die. They want to continue their cartel pricing and protect their CEO-tier pay, and the public will gullibly attack health insurance companies.
So why is car insurance ripe for disruption and not health insurance?
The difference between these 2 situations is that one is on the verge of dramatically lowering cost while the other is just a front by medical personnel to avoid criticism. There is no near-term breakthrough in health insurance that will lower cost.
Once Tesla solves Full Self-Driving, their insurance rates will plummet through the floor and no car insurance company will be able to compete.
But what about Progressive, GEICO, and all the current legacy auto insurers? Can't they just insure non-Tesla vehicles?
Short answer is no and that they are fucked.
- Tesla is already scaling EV manufacturing immensely and are growing 50% YoY. Every other car manufacturer is having serious problems scaling, and even if they somehow solved their problems, they will never have enough batteries because they're being swallowed by Tesla.
- FSD means there will be far fewer cars sold to consumers. Tesla will self-insure their fleet of robotaxis, so they're safe. Everyone else won't have enough volume to stay in business.
If I were an actuary in the auto insurance industry, I would look into moving to Tesla ASAP.
