Autonomous vehicle technology could shrink the auto insurancesector by 71% or $137 billion by 2050, according to new research byKPMG.

Related: Here's how self-driving cars are already impactingcities and towns

KPMG has extended its actuarial model by 10 years to 2050,finding that the pace of change has accelerated, pushingprojections that illustrate greater declines to the insurancesector than KPMG's previous 2015 study.

Triple threat

Here are the dominant forces disrupting the auto insuranceindustry outlined in KPMG's new report, "The Chaotic Middle: The Autonomous Vehicle andDisruption in Automobile Insurance":

— Autonomous technology is making cars increasinglysafer, leading to a potential 90% reduction in accident frequencyby 2050.

— The rapid adoption of mobility-on-demand is quicklytranslating into the need for less personal auto coverage, with theuse of fleets requiring commercial auto insurance.

— Auto manufacturers will assume more of the driving risk andassociated liability, and have new opportunities to provideinsurance to car buyers, taking market share away from traditionalinsurers.

KPMG estimates that by 2050 there will be a significant increasein product liability insurance, to 57% of total auto losses, inorder to cover the autonomous technology in vehicles, and aconsiderable decrease in personal auto insurance to 22% of totalauto losses.

"Insurance companies will have to make important strategic andtactical changes sooner than anticipated to navigate through thisturbulent transformation of the industry," said Jerry Albright,principal in KPMG's Actuarial and Insurance Risk practice. "Newbusiness models bring about a decade or so of a 'chaotic middle' asinsurers adjust their strategies and operations as autonomousvehicle technologies significantly deplete the need for personalauto insurance."

Related: Insuring autonomous vehicles

Mixed forecast

By 2024, the majority of travel within cities and surroundingsuburbs is expected to be on-demand rather than with a personalvehicle, and by 2035, it is expected to be the new normal intransportation.

As a result, product liability coverage and other new types ofinsurance are expected to pay a greater share of claims resultingfrom roadway accidents. Cyber crime is one example of a new type ofrisk associated with the era of driverless cars. It follows thatmarket participants are building new projects to cover thepotential hacking of autonomous vehicles.

"Insurance companies are varied in their level of preparednessfor this disruption and many have taken limited action to face thischallenge," said Joe Schneider, managing director at KPMG CorporateFinance LLC. "As a result, auto insurers may choose to branch outinto home-related products, or other commercial coverage, tobenefit from diversification."

Related: Report: Autonomous cars to drive $81 billion in newinsurance premiums