Norwich Union (NU) is to increase its fleet rates next year.
NU director of underwriting John Seaton said that fleet rates would gradually rise in an effort to keep up with claims inflation.
He said that if insurers did not start to increase rates, then in a couple of years' time profits would begin to suffer.
"The fleet market has stabilised but third party claims are getting bigger. At some point we need to catch up with claims inflation. We don't want to be lulled into a false sense of security," he said.
He would not comment on the scale of the increase. Claims inflation in the motor market currently runs at 7%–8%.
Seaton added that NU had no plans to grow the size of its fleet book over the coming year. "It is not the right time in the underwriting cycle to do so," he said.
NU writes £60m of fleet business a year.
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