The impact that autonomous vehicles will have on the insurance industry is speculative, at best. Case-in-point, over lunch recently, several of my colleagues and I had a discussion about the impact that autonomous vehicles will have on the insurance industry and how the industry can prepare for the impact. We each had very different, yet well-supported thoughts on the matter. Some thought the move to autonomous vehicles would push liability for accidents back on to the manufacturer, opening a whole new area for insurance companies. Others thought that autonomous vehicles would spell doom for the automobile insurance industry. Either way, changes are ahead for the insurance industry.

A few days ago Jeff McMahon, a Forbes contributor, penned an article boldly asserting that autonomous vehicles could put the automobile insurance industry out of business. He is not alone in his cautionary tale. A new research report, “Marketplace of Change: Automobile Insurance in the Era of Autonomous Vehicles, by the U.S. audit, tax, and advisory services firm, KPMG LLP revealed that the United States personal auto insurance sector could be reduced by 60% within 25 years. This is due to an estimated 80% decline in accident frequency due to safer vehicles and the adoption of autonomous vehicles. The decline could result in a sharp reduction in loss costs and premiums.

While not necessarily the end of auto insurance, it could spell definite changes for the industry. The KPMG report included a survey of several senior U.S. insurance executives. It revealed that insurers see the move to autonomous vehicles as an opportunity to develop new products, like niche writers, and policies for software developers. It could also open the door for new businesses to enter the insurance industry. A McKinsey report suggested that it could also change the focus of liability insurance from “private consumers to one that involves a few OEMs and infrastructure operators, similar to insurance for cruise lines and shipping companies.”

Regardless of the impact on the insurance industry, one thing is certain, insurance companies will need to work together to not only reshape the industry, but also assist legislators regulate it. In 2015 sixteen states introduced legislation related to autonomous vehicles. This is an increase from twelve states in 2014, nine states and the District of Columbia in 2013, and six states in 2012. So far, we have yet to see legislative action on the federal front. In the United Kingdom, eleven automobile insurance companies have already entered into a joint venture to represent the insurance industry while the government determines how autonomous vehicles will be deployed. In addition to the insurance lobby, we can surely expect to see more of these same ventures on this side of the Atlantic.