Motor premium rate increases ground to a halt in the last six months of 2001, according to Provident Financial Group.
Provident posted results showing pre-tax profits up 5.9% to £169.6m for 2001.
Group chairman John van Kuffeler picked out the company's motor insurance division as having had a record year, but warned a market downturn was possible.
Pre-tax profit from motor increased by 14% to £36.6m, compared to £32m in 2000.
The number of motor policyholders increased by 8.5% to 855,000 and gross written premiums increased by 16% to £255m.
Kuffeler said: "There are now signs of a change in pricing conditions in the market.
"Our premium rates increased by 6% in 2001 compared to 17% in 2000 and, in a more competitive market, premium rates increased only slightly in the second half of the year."
Provident Financial is listed 24th in the November 2001 Insurance Times Top 50 general insurance groups.
Its insurance division comprises motor specialist operations Provident Insurance and Colonnade Insurance Brokers.