Allianz Cornhill will raise motor rates in 2007 in a bid to improve profitability.
The move comes just months after Norwich Union pledged a 16% rise in private motor rates.
Allianz Cornhill chief executive Andrew Torrance confirmed the move as he unveiled the insurer's third quarter results.
He said: "We've not increased our rates as of today but expect to move rates up in 2007.
"Different carriers will find themselves in different positions. We don't feel we need to move as much in certain segments of the market."
Allianz Cornhill, he added, was now recording an underwriting profit in private motor and expected a profit for the full year.
This was despite a further slump in personal lines to £190.2m compared with £215.3m in the same quarter last year. In the first half, the insurer reported personal lines gross premium income of £127m.
For the third quarter, the insurer's personal lines combined ratio stood at 98.3% compared to 99% for the same period last year.
Commercial lines premium grew to £793m for the year to date from £775.8m for the same period last year. The combined ratio improved from 91.4% in 2005 to 91.1% this year.
The company's overall profit before tax marginally improved from £169.9m to £172.4m for the third quarter, with a reported profit of £71m in the last quarter. Gross business premium has fallen from £1.25bn to £1.2bn, although GWP for the last quarter was £397.5m, up 3.6% on the same period last year.
The overall combined ratio for the year improved from 93.7% to 93.1%.