FLEET insurance is likely to rise as insurers bid to recoup losses made in previous years through rock-bottom premiums, it emerged this week.

General Accident's better than expected half-year operating profits of £194 million down from £257 million in the first half of 1995, reveal the insurers' commercial motor division was not making money.

This year private motorists' premiums have increased by 6% and a further 3.5% rise came into effect this month. General Accident says the rises would feed through to many fleet premiums. GA pulled out of insuring large fleets earlier in the 1990s because of a failure to make money. It could concentrate on sub-25 vehicle fleets. Fleets are unlikely to be affected by a blanket rate rise as individual experience coupled with individual risks and geographical areas play a key role in determining premiums.

Commercial motor manager, Derek Forgan said: 'Some fleets will be hit harder than others but the trend is for premiums to go up. The insurance industry is experiencing tough conditions.'

A Norwich Union spokesman said: 'We support G A's initiative. We find premiums for fleets to be uneconomic and we expect premium increases. We cannot put a figure on any rise because each fleet is underwritten on an individual basis and the premiums depend on the experience of the fleet.'