A decline in accident frequency due to safer vehicles and the adoption of autonomous vehicles could shrink the U.S. personal auto insurance sector by 60% within 25 years, according to a new research report, titled "Marketplace of Change: Automobile Insurance in the Era of Autonomous Vehicles," from KPMG LLP, the U.S. audit, tax, and advisory services firm.
KPMG's Insurance practice estimates an 80% potential reduction in accident frequency by 2040. This is expected to result in a potentially drastic reduction in loss costs and premiums, though KPMG estimates that accident expense could increase from almost $14,000 currently to about $35,000.
"Autonomous vehicles are poised to completely transform the auto insurance industry, and underlying market forces, including technology enablement, consumer adoption, and regulatory permission, are already aligning to enable mass change," said Jerry Albright, principal in KPMG's Actuarial and Insurance Risk practice. "The risk profile of vehicles is changing daily, and the subsequent drop in industry loss costs would reduce the size of the auto insurance market, trigger consolidation in the personal lines space, attract new competitors, and force dramatic operational changes within carriers."
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
