The smaller amount of claims will result in fewer payouts, and also fewer employees needed for claims administration. But this is just a decrease in costs which will (presumably) be passed on to the consumer through cheaper premiums. The reduction in costs should exactly match the reduction in premiums, so profits should remain stable. A reduced number of claims should not have an effect on profits in the long term as long as the number of drivers stays constant. TFA guesses that the number of drivers may decrease, but I doubt the decrease will be significant; in any case, the focus is mainly on a better safety. So the result will be vastly inflated profits for several years as the number of claims drop, and then a bunch of layoffs as companies cut costs to compete on price. If you WORK in insurance you should be worried. If you OWN an insurance company, you should buy champagne. Warren Buffet says "we would not be holding a party at our insurance company.” Of course not, everyone there will lose their jobs. He will have the party in his house, with the other stockholders.
This is not at all the same as Napster, which resulted in drastically fewer customers for music. I'm no economist, so perhaps I am missing something; feel free to enlighten me.