NEW YORK -- Allstate is bracing for self-driving cars to upend its most lucrative business.
The insurance giant earns nearly two-thirds of its revenues from policies on cars, and will likely have to expand or introduce other areas of coverage moving forward, according to a report Bloomberg Businessweek published Thursday.
"There will be fewer cars. There will be fewer accidents. And it will be safer," Allstate CEO Tom Wilson told the magazine. "When you're as big as we are and insure 16 million households, it doesn't take much of a degradation to be a real revenue issue for you. So we are focused on it."
Allstate spokesman Justin Herndon pointed to Wilson's recent letter to shareholders.
"Some industry participants are waiting to see how this will play out," Wilson wrote. "Allstate is not. We are moving forward into uncertainty rather than wait."
The insurance industry has been scrambling for months to tailor policies to new autonomous driving technologies. Auto insurance is regulated on a state level, so any new policies must await a ruling by the states. When Tesla Motors announced plans to release a limited autopilot feature in its cars this summer, insurers in California looked to state regulators for a cue on how to move forward. They're still waiting for that guidance.
Insurers have proven themselves adaptable in the face of technological change. For example, companies rolled out specially crafted policies for drivers using their vehicles for both personal and professional use when working for ride-hailing services such as Uber or Lyft.
"There are inherent risks that are different for a person who's driving for personal reasons rather than commercial reasons," Loretta Worters, vice president of the Insurance Information Institute, an industry-funded nonprofit, told The Huffington Post on Thursday. "Thus we're able to treat that differently so companies can offer a policy that would address those issues."
It may take decades for human drivers to be mostly supplanted by robotic ones, but analysts predict the rise of autonomous vehicles will reduce personal car ownership as commuters summon self-driving cars the way they might request an Uber driver now.
Still, those cars -- which, devoid of human error, are likely to collide less -- will need to be insured.
"Even though crashes may be down, there will be coverage needed for things like wind, floods and other natural damages, which is comprehensive coverage," Worters said. "This is still very new, but the insurance aspects of this transformation -- and it's going to be gradual -- are still unclear."
Allstate has considered selling coverage on mobile phones or finding ways to monetize the data it collects on its customers, the Businessweek report noted.
This post has been updated with a comment from Allstate.