Car insurance premiums for motorists are set to climb further this year as providers try to make up for the losses suffered in 2010 as a result of a surge in the number of claims, a report has warned.
According to Deloitte car insurance providers in the UK were hit by collective losses of more than £2 billion last year, as they paid out an estimated 120p for every 100p received as premium.
Insurers surveyed by the accountancy group blame the increase in the number of claims, particularly no fee, no win personal injury payouts for the huge losses which come despite the 10% average increase incar insurance premiums over the year.
Deloitte insurance partner James Rakow says providers are likely try to offset the pressure by pushing up premiums for motorists.
Many companies have had to bolster their reserves with millions of pounds to meet the rising costs of claims, and even by increasing premiums insurers do not expect to break even at least until next year, the report added.
Copyright © Press Association 2011