At last weekend’s Berkshire Hathaway Inc. annual meeting, one shareholder asked Warren Buffett how his auto insurer Geico might fare in the event that autonomous-driving technology succeeds in slashing the number of accidents, as Tesla Inc.’s Elon Musk suggested it would on an earnings call last month. “If accidents get reduced 50%, it’s going to be good for society and it’s going to be bad for insurance companies’ volume,” Buffett said. Musk shot back on X to recommend that Buffett should buy a stake in Tesla.

That was funny and thought-provoking. In an age of tremendous uncertainty for the insurance industry, I certainly agree that investors should hedge their bets with small exposures to potentially disruptive technologies. But with climate change, inflation and runaway litigation all wreaking havoc, I’m dubious that “too few accidents” is the tail risk that should most concern them going forward.

QOSHE - Buffett Shouldn't Worry About Self-Driving Teslas - Jonathan Levin
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Buffett Shouldn't Worry About Self-Driving Teslas

28 2
08.05.2024

At last weekend’s Berkshire Hathaway Inc. annual meeting, one shareholder asked Warren Buffett how his auto insurer Geico might fare in the event that autonomous-driving technology succeeds in slashing the number of accidents, as Tesla........

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