This does not make sense. Crashes mean insurers pay out. The ideal scenario from insurers perspective is to have people paying premiums and never crash, then the insurers are getting money for nothing.
If the argument is that they increase rates due to crashes, disproportionate to the cost of the crash, then that is no different from just arbitrarily raising rates at any point, whether crashes are increasing or decreasing.

Furthermore, while I suppose it is possible to have red-light cameras and not just use them as a cash cow, once a city installs them–even if for purely safety purposes–the city begins to rely on the revenue, making it extremely difficult to keep them from using the cameras improperly.

I was initially confused by your post and the studies you cite because they seem so counterintuitive. It seems like to most obvious incentive would be to be more cautious at intersections. Having recently moved from Wisconsin (where there are no red light cameras) to Missouri, my behavior has certainly changed in such a manner. But I suppose the incentive story could work the way you’re suggesting. To test this, I did an informal Google Scholar search of “red light cameras” and looked at the first 3 pages of citations.

The majority found that red light cameras reduced traffic accidents, especially right angle crashes. However, there were also a few that suggested the opposite, similar to the study you cited. I don’t know enough to suggest the evidence is conclusive in one direction or another, but one study probably isn’t enough to base one’s policy prescriptions on.

On the second point, suggesting that it’s not a relevant option because it’s just too tempting is a non-starter. I could similarly argue that simply banning the cameras is not a relevant option because “the temptation to use them as a revenue stream is probably too strong to resist.” Both are viable options, but if the real cause of the increased accidents is shorter yellow lights, then it would be good sense to eliminate that, while still reaping the alleged benefits of red light cameras.