Tesla Inc.'s managing general agent direct premiums written more than doubled in 2022.

The automaker's managing general agent (MGA) relationships produced total direct premiums written of $242.9 million in 2022, compared to the $111.7 million in 2021, according to information contained within Note 19 of annual regulatory statements in the US. The bulk of the premiums are related to its relationship with Markel Corp.'s State National Insurance Co. Inc. Its program did expand in Texas during 2022 through its relationship with Redpoint County Mutual Insurance Co.

A managing general agent is a specialized insurance broker that has been granted underwriting authority and performs certain functions generally handled by an insurance company. In the case of Tesla Insurance Services Inc., it has been granted underwriting, claims adjustment and payment, premium collection, binding authority, and reinsurance ceding authority by Markel. For Redpoint, the reinsurance authority was not granted.

In addition to Tesla’s MGA relationships, the electric-vehicle maker began issuing car insurance through its own in-house insurance company in 2022.

Q1 premiums surpassed 2022 total

The combined in-house insurance units of Tesla reported direct premiums written of roughly $14.0 million during the first three months of 2023, compared to $12.7 million during the last nine months of 2022. The insurer began reporting premiums during the second quarter of 2022.

The electric-vehicle maker's insurance units recorded their first premiums in Texas during the first quarter, generating $4.3 million in premiums in the Lone Star State, while its MGA relationship with Redpoint reported an additional $9.1 million.

– Read about the impact of tort reform within Florida's private auto market. – Read about State Farm's first quarter of 2023 results.

The company is looking to offer insurance nationwide and eventually internationally on its vehicles, according to comments made by CEO Elon Musk during the company's annual shareholders meeting. He further noted the current US regulatory structure was the reason for not currently having a national rollout, as every state has its own rules and regulations and each requires a "staggering amount" of paperwork.

The next two states the insurer may launch its insurance product in are Florida and Washington, as each state regulator has approved its offering. The Florida filing was approved in March with an effective date for new business on April 15; however, the Sunshine State is not listed as a state where coverage is currently available, according to the automaker's website. Its Washington filing shows a new business date of July 15.

Loss ratios trending in the right direction

Tesla's direct incurred loss ratio for its in-house insurance business has fallen every quarter since its launch. The insurer’s direct loss ratio was 95.6% during the first quarter, nearly a 14-percentage-point improvement from the previous quarter and roughly a 42-point improvement from the second quarter of 2022.

Breaking out the individual lines of business that make up private auto insurance, the combined liability lines loss ratio was only 22.2% during the most recent quarter, compared to 408.0% for auto physical damage.