Rising insurance costs have forced 10% of UK freight companies into self-insurance, according to a report by fleet support services company Lex Transfleet.

The report, Freight Transport 2003, surveyed more than 250 freight fleet managers. It found that insurance accounts for 16% of a freight fleet's total costs on average, and that freight vehicle insurance rose by an average of 17% in 2001 and 20% in 2002.

Lex Transfleet finance director Stuart Ingall-Tombs said that on top of rising vehicle insurance costs, increasing liability rates were responsible for many larger companies opting to absorb the cost of claims themselves.

The report found that other responses to escalating rates included 56% of respondents putting pressure on their insurers to reduce costs, 40% investing in training to reduce

the number of driver accidents and 27% switching insurance suppliers.

"They're the knee-jerk reactions of an industry trying to find solutions," Ingall-Tombs said.

The number of freight fleet managers who cited insurance costs as a major concern rose from 51% in 2000 to 72% this year.

If the cost of insurance was to rise by another 10%, a prediction that Ingall-Tombs described as "conservative", half of those surveyed said they would be forced to hike up their prices in less than six months.