Motor insurance premiums 'set to rise'

The benefits of accessing the cheapest motor insurance deals could be set to increase next year, as Deloitte says premiums are likely to rise.

According to the professional services firm, insurance companies have struggled to replace the income lost by lower investment returns during the recession.

Deloitte predicts that a five per cent rise in premiums is likely to be seen in 2010 as insurers attempt to balance the books.

James Rakow, insurance associate partner at the firm, noted that the industry had been struggling since 2007.

He stated: "Indications are that the current year trading is far from being profitable at a market level and this is likely to remain the case in 2010.

"For the last few years prior year reserve releases have been at exceptionally high levels. I do not expect to see anything other than modest levels of reserve releases in 2009."

Consumers can assess the motor insurance deals available on the market using comparison services at Moneyextra.com.

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2009-12-04 12:57:38 © Moneyextra.com