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Daily Insurance Industry News
Friday 25th of May 2018
September 5, 2007

Admiral warns on motor premium rises

by Gill Montia

Story link: Admiral warns on motor premium rises

Admiral has added its voice to those predicting that car insurance premiums are likely to rise ahead of inflation in the coming year.

The insurer, which specialises in selling policies to drivers who generally pay higher premiums, has already increased motor premiums by over 5% this year.

In recent times, motor insurance has been subsidised by some insurance companies which have used their reserves to keep their share of a highly competitive market.

For many insurance companies, such reserves have been growing steadily but according to Admiral, the current level of reserve releases for the market is not sustainable in the long-term.

This view is supported by analysts at Citigroup, the banking and insurance conglomerate.

Also to be taken into account is the effect on insurance company reserves of the claims for this summer’s flooding.

Admiral believes that the level of premium inflation into 2008 will depend essentially on the underlying profitability of the market.

Finally, Admiral has just published its first-half results showing an increase in pre-tax profit, to £86.3 million, compared with £68.7 million in the same period of 2006.

 

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