An important Hyperloop milestone just occurred and few people noticed because no flashy celebrities were involved. An agreement to create the first Hyperloop insurance was just signed.
German insurance giant Munich RE and Hyperloop Transportation Technologies (HTT) have formed a partnership to manage risk and write insurance policies for the next-generation transport solution, Reuters reported. No policy is available yet instead, HTT and Munich RE will try to develop one.
This is an important step because the potential risks that would be created by Hyperloop are vast and mostly unknown. Insurance is vital because it will help Hyperloop systems attract investment and a better class of investors than publicity-hungry egomaniacs like Richard Branson.
The Vast Risks from Hyperloop
Another benefit from insurance is that it will allow HTT to test its technology with human riders and cargos. There are many potential dangers from Hyperloop including injuries at high speed, suffocation in the tube, and crashes.
A greater potential problem is that nobody with a brain will ship cargo through a ship that is not insured. If HTT wants to make money it will need insurance.
“Being able to offer an insurable system is a huge milestone for this groundbreaking technology,” Dirk Ahlborn’ CEO and co-founder of HTT, said.
Insurance Brings Hyperloop One Step Closer to Reality
“The technology developed by HTT is set to fundamentally change the way we travel in future,” Torsten Jeworrek, a Munich Re board member, said. “Such technological shifts give rise to new insurance needs that demand innovative solutions – which our Hyperloop team is happy to develop.”
HTT is the crowdfunded organization that has a Hyperloop test facility in Toulouse, France. Unlike Hyperloop One, HTT has not yet built a working Hyperloop model. Like Hyperloop One it is conducting feasibility studies for a number of routes including one between Bratslavia and Brno in the Czech Republic.
Munich RE’s entry into the field may help HTT’s competitors like Hyperloop One and Hardt Global Mobility by making an insurance product available to them. Hyperloop One, in particular, will need a lot of coverage when it starts testing its system with people in it, probably next year.
Hyperloop Needs Warren Buffett not Elon Musk
This story demonstrates why Warren Buffett, would be the perfect celebrity billionaire for Hyperloop. Buffett owns a railroad; the Burlington Northern Santa Fe or BNSF, his Berkshire Hathaway (NYSE: BRK.B) is a major provider of all kinds of insurance, and unlike Elon Musk and Richard Branson, Uncle Warren actually has the money.
Berkshire Hathaway (NYSE: BRK.A) had $99.75 billion the bank almost $100 billion, on 30 June 2017. Musk’s Tesla Motors (NASDAQ: TSLA) lost $294.54 million in cash from operations during second quarter 2017.
The only drawback is that Buffett does not do crazy stuff to attract media attention, he simply makes money. That might be the best selling point of all, which journalists will hate.