Motor industry insurance profits ‘unlikely in 2009’, says AA insurance

The claim by Datamonitor that the UK motor insurance industry will make a profit in 2009 is unlikely to be realised, AA Insurance believes.

Britain’s leading car insurance broker points to continuing claims inflation and premium competitiveness as key factors that will make profitability in two years’ time unlikely.

Andrew Strong, CEO of AA Insurance, said that the cost of claims is showing no sign of slowing. “The cost of damage to property and vehicles is rising by around 5% per year. On top of that we are seeing personal injury claims continuing to increase by 10% per year as accident victims are more willing to make such claims