Car Insurance Premiums Likely to Rise in 2010: Deloitte

This stems from their recent financial report which suggests the car insurance industry made losses totalling £1 billion. It is a testing time for the industry, which experienced a steady rise in recent years.

James Rakow, Insurance associate partner at Deloitte said: "Results at a headline level for UK motor insurers have shown this market cruising along at close to underwriting breakeven point from 2001 to 2007."

However, the losses incurred in 2009 are expected to continue for the car insurance industry that is currently valued at around £12 billion. Recent estimates predict that car insurance providers will be forced to increase their premiums by a minimum of 5% to replace their lost income.

Mr Rakow added: “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.”

Results from Deloitte’s Motor Premium Index inform us that car insurance premiums are now rising at its fastest rate since 2003. Comprehensive car insurance premiums rose 11% last year and the incline in fees shows no sign of letting up.

This latest development places even greater importance on car insurance comparison sites that will allow drivers to sift through and find the providers that fight the financial losses with competitive rates.