Will Tesla, Inc.’s (NASDAQ:TSLA) full self-driving technology pose a risk to the prospects of one of Berkshire Hathaway, Inc.’s (NYSE:BRKA) (NYSE:BRKB) portfolio companies? Billionaire investor Warren Buffett was asked this question at the company’s annual shareholder meeting on Saturday.
Tesla A Risk To GEICO? An investor in both Elon Musk‘s Tesla and Berkshire posed a question to Buffett: If Musk succeeds in reducing accidents by 50% compared to human drivers with Full Self-Driving (FSD), wouldn’t auto insurance rates decrease to reflect the reduced underwriting risk? The investor also asked the investment guru whether this would affect GEICO‘s revenues, float and margins.
In response, Buffett stated that if accident rates decrease, the data will reflect it, and consequently, prices will come down.
“There have been a lot of people talk about doing that in the past. I mean General Motors used to be very big in the insurance business and when Uber first started, they used some firm, which ...