8 October 2007
Car insurance premiums have risen by around 10% over the past year, new research from Deloitte shows.
The survey, which measured third party motor insurance premiums, showed that the average car insurance cost in Britain had risen to £519 for August 2007.
This beats August last year's figure of £473 - with nine premium rises being registered over the past 12 months.
Insurance partner at Deloitte Catherine Barton commented: "The key reason for the increase is insurers seeking to improve profitability.
"In the past several years, the underlying motor insurance market performance has been deteriorating, with insurers' results being buoyed by releases from their reserves.
"This situation is not sustainable in the long term and, combined with the impact of major events such as the 2007 floods, rates were going to have to go up. We believe premiums will continue to rise for a few months yet."
Rising premiums could also point to an increasingly competitive car insurance market in the UK, with increased use of price comparison websites leading to higher consumer knowledge and churn rate.