Fishman and others have said that a continued decline in claims costs will push down premiums, squeezing the industry and its profits. Larger insurers have still prospered over the decades because of growth in the U.S. population and the companies’ ability to use their huge advertising budgets to attract customers.
The risk for even the biggest national companies is that the industry contracts faster than they can take market share from regional rivals. Continued safety improvements and the adoption of autonomous cars could shrink the U.S. auto insurance industry by 60 percent in the next 25 years, according to a KPMG report in June.
“It’s only logical that insurance companies would be looking into this direction” of selling customer records, James Dempsey, executive director of the Berkeley Center for Law & Technology, said in an interview. “From a business perspective, it’s almost irresponsible to not think about how to use the data.”