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No. of Recommendations: 4
For startups one key to success is positive cash flow. Growth requires a lot of cash for plant and equipment, R&D, S&M, etc. Tesla insurance can be a powerful source of cash flow. In the linked video one of the first things they talk about is Warren Buffett's love of insurance float as a source of investing capital.

In an ideal situation an insurance company breaks even on the risk side of the business and generates profits from the investing side. The video goes into the ways Tesla can beat the competition with better actuarial and personal data so I won't cover that. Having been an insurance agent I can talk about the savings of not having insurance agents and brokers. I used to be paid a 30% commission on individual policies and 15% on collective policies. I don't know what insurance agents and brokers are paid in America but the savings can lower premiums considerably creating a terrific competitive advantage.

But the real benefit is the low cost of money to finance growth as Tesla competes with larger incumbent automakers. There are so many facets to Tesla that naysayers ignore which support the seemingly outrageous stock price.

Denny Schlesinger

Tesla Insurance Will Dominate & Transform The Insurance Industry
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