Nine out of 10 insurers are predicting motor insurance costs will rise in the next few months, with the upward trend set to continue into 2010.

Research carried out by Aon’s Market Pulse revealed 91% of underwriters are predicting a rise for UK companies renewing their motor insurance policies in Q3.

This is in stark contrast to the predictions for Q2 in which every underwriter stated there would be no change in rates for this type of cover.

“The increasing cost of claims and the fall in investment return is increasing the upward pressure on motor fleet insurance premiums,” explained John Briggs, head of technical motor underwriting at Zurich.

“As a result of these upward pressures premiums have been rising throughout the year and on average ‘claims inflation plus’ rate increases will be required going forward with the level of rate increase experienced by each fleet varying dependent upon that risks own experience.”

However, while some insurers are actively increasing their rates, new entrants to the market as well as the desire to retain market share means that overall rate rises are predicted to be modest.