Car insurers lead market gains after AA data on premiums

British car insurers were the best of the lot in the London market after motoring group AA reported that Shoparound premiums – an aggregation of the five cheapest premiums available – rose by 1.2% in the latest quarter to reach £531.

That was the first increase since early 2012, although they were still 14.4% below the year-ago levels.

“This suggests that while there continues to be keen competition amongst the cheapest car insurance providers, claims pressure is pushing premiums up," the AA said in a statement.

Interestingly, AA said claims management companies and law firms may have found loop-holes around the government reforms put in place to brake fraudulent and exaggerated claims.

As of 15:30 shares in Direct Line Insurance were to be seen higher by 3.21% to 2,799p and those in Admiral Group by 2.74% at 12,770p.