Insurer Admiral warned of further price rises for motorists even after hiking premiums by 40 per cent over the past year.
The Cardiff firm covers 4.76m UK vehicles, 380,000 fewer than a year ago, after customers were put off by higher rates.
Rises helped keep profits rolling in even as the rising cost of car repairs and wages means it must spend more to meet claims.
Industry figures last week showed the average annual cost of UK car insurance has hit a record high of £511.
Admiral said yesterday that it raised average premiums 20 per cent in the six months to June, on top of 20 per cent over the previous six months.
Price hikes: Admiral covers 4.76m UK vehicles, 380,000 fewer than a year ago, after customers were put off by higher rates
Admiral chief executive Milena Mondini de Focatiis told the Times: ‘We expect to continue to increase prices.’
It came as Admiral published half-year results showing underwriting profits for its UK motor insurance business fell by 4.5 per cent to £189.5million.
Overall group profits for the company rose 4 per cent to £233.9million.
The firm, known for its adverts that feature an admiral character, cut its dividend but shares still rose 7.2 per cent, or 159p, to 2358p as its boss said while the market has been challenging, ‘the cycle is turning’.
She defended motor insurance rises, saying firms paid out £1.10 in claims for every £1 they took in premiums last year.
Amanda Blanc, chief executive of Aviva, which also put up its prices, denied it was making excess profits.
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