The Allen and Allen Group has predicted that motor premiums will remain static or witnessed a slight decrease in 2005.
The motor insurance brokerage said premium prices have peaked in 2004. It does not expect massive price drops in the short term, but said that increased competition in the market would prevent massive hikes.
The company also said that insurers have more accurate data on which to base their quotes, and a far greater understanding of risk assessment in each market sector. As a result, insurers know where their break-even point is and are unwilling to drop below it and lose money, even if this means losing business, it said.
However, Allen and Allen warned that FSA regulations may have an impact on overall insurance rates, as could the proposed EU directive on gender equality, which in the unlikely event that it is passed may prompt higher motor insurance rates for young women and older men.
