Motor insurance premiums 'could rise by 20%'

Motor insurance premiums could rise by up to 20 per cent during 2010, one industry commentator has warned.

Writing for the Financial Times, the newspaper's insurance correspondent Paul Davies said "cut-throat online competition" and a greater volume of bodily injury claims had hit the industry hard.

He suggested that 2009 was one of the least profitable years on record for motor insurance providers, adding that they may have no choice but to raise prices across the board.

Citing figures from independent actuarial firm EMB, Mr Davies reported that providers shelled out £1.20 for every pound received in premiums, leading them to make significant losses over the course of the year.

"The number of claims has risen, encouraged by claims management companies and no-win, no-fee solicitors," he reported.

Last month, professional services firm Deloitte also warned that insurance premiums could be set to rise - a situation which may encourage customers to seek the best van insurance offers available over the internet.

Moneyextra.com recommends you take independent financial advice before acting on any article

Back

2010-01-12 13:15:56 © Moneyextra.com