Insurer Admiral after releasing the profits on July 30th, 2008, sounded the alarm bell for higher premium rates for all car owners. Elephant, Diamond and Confused.com, companies owned by Admiral, have predicted the inevitable rise of premium by a few points in the coming months.

Admiral quotes a rise of 16 per cent in profit before tax to £100.3 million in the first half of 2008 and a return of 13 per cent to £472.5 million. Not only insurer Admiral, but CEO David Stevens claims that increase in premium rates has witnessed fewer claims over the last 18 months. He also exclaims that for the first time in the UK in seven years a genuine prospect of decreasing underlying loss ratios can be seen in the main UK business.

The extremely competitive motor insurance industry did not raise premiums for quite a few years even though there was an increase in the cost of claims. But how long can they sustain themselves in this scenario, claims insurers.

According to Mr Stevens, there will be a rise of two to three percent in the near future. Well, insurers in the end are having the last laugh since increase in petrol prices have somewhat forced consumers to use their cars less frequently and therefore fewer accidents and less claims!