Financial News

• Brown dismisses housing crisis fears (09 04 2008 10:15)
• Mortgage hope offered by bank (09 04 2008 10:15)
• Consumer morale 'falls again' (09 04 2008 10:15)
• Bristol & West withdraws deals (09 04 2008 10:15)
• Retirees feel 'unhappy due to no longer working' (09 04 2008 10:15)
• Severn Trent to be fined £36m (08 04 2008 04:15)
• Brown to announce first time buyers help (08 04 2008 04:15)
• UK bank details 'for sale by thieves' (08 04 2008 04:15)
• Last 100% mortgage to disappear (08 04 2008 04:15)
• High earners 'shut out of market' (08 04 2008 04:15)

Subscribe!

Insurance profits 'unlikely'

A UK insurance provider has rejected reports that the motor insurance industry is set to make a profit in 2009.

Earlier this week Datamonitor released figures suggesting that the motor insurance was likely to gain £30 million in underwriting profit for 2009.

However AA Insurance has now contested these figures, citing claims inflation and premium competitiveness as reasons why the industry is unlikely to make profits for that year.

To reach the levels of profit outlines by Datamonitor the industry would have to raise premiums by around 20 per cent over the next two years, AA claims.

"Online buying means that buyers are much more likely to shop around for car insurance and buy on price. That is keeping premium rises in check," AA chief executive, Andrew Strong, said.

"So far this year we have not seen industry premiums rise by anything like the amount that would make the industry profitable. It remains a very volatile and competitive market and we don’t see that changing in the immediate future."

The AA's benchmark British Insurance Premium Index reveals that premiums rose by an average of 5.9 per cent during 2007.

Send this article to: