26/06/2008 19:38. Business information group Datamonitor says insurance companies are losing money and as a result will raise their premiums to return to profit. Figures show there has already been a 20% increase in the past 12 months, adding £100 onto the average premium. Over the next year premiums are expected to go up by the same amount again.

A rise in the number of accident victims taking insurance companies to court and high administration costs have been blamed for the increase. Datamonitor says much of the rise is due to "huge" underwriting losses, meaning that many firms now need to generate cash quickly.

Although such losses dropped to £1.31bn in 1999 from £1.47bn the previous year, it said the sum was "still considerable". The cost of claims has also continued to rise, standing at... // Only Finance