KPMG: Automobile Insurance in the Era of Autonomous Vehicles

Overview

This KPMG research report, titled “Marketplace of Change: Automobile Insurance in the Era of Autonomous Vehicles,” predicts 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 percent within 25 years.

KPMG’s Insurance practice estimates an 80 percent potential reduction in accident frequency by 2040. This will 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 roughly $35,000.

By 2040, KPMG believes this sector will cover less than $50 billion in loss costs in nominal dollars, compared with the current $125 billion, with premiums moving nearly proportional.