When not training for a triathlon, longtime insurance executive Kim Garland said he spends "a lot of time thinking about Tesla insurance these days."
Since stepping down as president of State Auto Insurance just over two months ago, Garland has mulled how disruptions facing the property and casualty industry – in-house coverage for the EV maker's captive, fanatical audience as just one example – will guide his own next chapter.
"There's probably a lot of insuretechs that will try and solve pieces of this," Garland told Columbus Inno. "If carriers have to significantly change to respond to this (disruptive environment), there's probably going to be a lot of opportunity ... for leaders to try and drive change."
Garland joined State Auto Financial Corp. in 2015 and led its in-house venture capital arm. In March 2022, Liberty Mutual Holding Company Inc. acquired the Columbus public company and its member-owned mutual insurer.
Garland was promoted to president of the State Auto subsidiary to lead the year-long integration into the much larger Boston company, stepping down when that was complete. Liberty now is in the process of converting personal State Auto policies to its larger Safeco brand, while keeping the State Auto name for commercial lines.
The consolidation trend in personal insurance is likely to continue nationally, Garland said.
In auto coverage alone, he said, the systems to run a "top-shelf" carrier are expensive, while competition brings pressure to lower premiums. The biggest players have the biggest savings cushions in recent catastrophic weather years.
"The ability of small carriers to do that, it just gets harder and harder," Garland said.
Five carriers, with Columbus-based Nationwide at No. 5, control 54% of market share for home and auto premiums in the state of Ohio, according to the latest state data from 2021.
Even the largest incumbents face disruptive forces, Garland said, forming the starting point for his thoughts on what's next.
For example, on the auto side, Tesla offers its own insurance to customers, so there's no advertising costs – an expense that gets reflected in premium for other carriers.
Add to that fewer claims: With autopilot engaged, a Tesla has about 1/4 the frequency of crashes as the nationwide total. The company reports one crash per 4.9 million miles driven on autopilot, compared with the U.S. total of one collision reported to police for every 1.2 million total miles driven, according to federal safety and traffic data.
That means a few years from now Tesla's policies could be half the price of the general market while generating higher margins, Garland said.
(However, a Washington Post analysis this week, of data automakers report to the government on only their vehicles with driver-assistance technology, indicates Tesla accounts for by far the most crashes, and has had an increase in fatal incidents since rolling out full-self-driving mode in 2022.)
For homeowners insurance, some huge carriers in recent weeks have stopped issuing new policies in California and Florida because of massive costs from wildfires, hurricanes and other natural disasters. The smaller carriers willing to offer coverage will no longer compete on price, he said, but on how to reduce losses the way autonomous driving does in auto coverage.
"As I think about my own future, I think about: What are the opportunities that creates?" Garland said. "And what would be a fun thing to do?"
Falling in love with Columbus
Starting as an actuary 35 years ago, according to his LinkedIn profile, Garland worked at insurers including Geico, Safeco and AIG before State Auto. Often his was in a turnaround position. With the State Auto Labs VC arm, he helped entrepreneurs match their startup ideas to what would solve a practical problem for an insurance customer.
That translates into a lot of options, Garland said: join a VC firm now that he has the investing bug, start a consultancy to help insuretechs navigate the industry, or become an operating partner who helps right troubled ships.
Leaving Liberty after the integration process was complete was a natural step after a "great" year, Garland said. There aren't many openings at "super-senior" roles like president in the industry.
"A lot of times jobs are jobs, but sometimes you fall in love with the place and you fall in love with people," he said. "There's 2,000 State Auto folks that had just been acquired and had to go through this year of worry and stress. ... It was super important to me to do whatever I could to get them to the other side of this in as good a shape as humanly possible.
"That task had been done; there was a sense of accomplishment."
In the third time leaving a company post-acquisition, he said, he's in the phase of sleeping more, focusing on health, and reflecting.
"I do Ironman triathlons for my midlife crisis, so this (downtime) allows me to ride my bike and run a whole lot more," he said. "I'm probably in better shape than I've been in, in a few years."
Since his first local triathlon in 2008, Garland has competed in 12 full Ironman races – more than 140 miles combined swim, bike and run – and nearly three dozen "half" Ironmans. The grueling competition taught him two things, he said: "People can do more than they think they can do," and never listen to the voice that tells you to quit when it hurts.
Having lived in the New York City area, Seattle and D.C., Garland and his wife, Diane, built their "dream home" on the Scioto River in Columbus "with the intent on staying the rest of our lives," he said in a follow-up message. He's hoping the next venture doesn't change that.
"I've also tried to look back on the last eight-ish years of State Auto. ... What did I do right, and it worked, and what did I do wrong?" he said in the interview. "Just figure out the things that either made me a effective leader during this last era, or things I need to do differently to become a more effective leader in the next era."
