Insurance companies make money by investing the premium in investments. A correctly balanced insurance book will match premiums + claims over an expected time period. The idea is to invest the premium and make money off the investments. This is why Warren Buffet buys insurance companies, because he is a good investor.
If an insurance company is paying out more in claims than they are taking in in premium, that is when they will increase the premiums. If they are taking in more premium than they are paying in claims, they will generally identify areas where this is the case, and lower premiums to attract more customers.
There is a lot of ignorance about insurance companies on this thread. There is also a lot of ignorance that self-driving cars will require no insurance. Not all of the cost of insurance goes to insuring the driver hitting something. There are fire, theft and third party property + injury components. None of these will be removed, though some may be reduced over time in line with claims being lower.
Most of the extra cost of insurance in a large city has to do with the theft component (especially if not garaged). People who live in rural areas pay much less insurance than those in city areas, principally due to decreased theft rates. Autonomous cars will be stolen just like regular cars.