A decline in accident frequency due to safer vehicles and theadoption of autonomous vehicles could shrink the U.S. personal autoinsurance sector by 60% within 25 years, according to a newresearch report, titled "Marketplace of Change: Automobile Insurance in theEra of Autonomous Vehicles," from KPMG LLP, the U.S. audit,tax, and advisory services firm.

KPMG's Insurance practice estimates an 80% potential reductionin accident frequency by 2040. This is expected to result in apotentially drastic reduction in loss costs and premiums, thoughKPMG estimates that accident expense could increase from almost$14,000 currently to about $35,000.

"Autonomous vehicles are poised to completely transform the autoinsurance industry, and underlying market forces, includingtechnology enablement, consumer adoption, and regulatorypermission, are already aligning to enable mass change," said JerryAlbright, principal in KPMG's Actuarial and Insurance Riskpractice. "The risk profile of vehicles is changing daily, and thesubsequent drop in industry loss costs would reduce the size of theauto insurance market, trigger consolidation in the personal linesspace, attract new competitors, and force dramatic operationalchanges within carriers."