Online premiums dipped slightly during the fourth quarter in 2007 – this was the first quarter to see a fall in average price since 2005.

While a review of 2007 revealed an initial increase during the first half of the year, it also showed the average online premium becoming more stable in the final six months, with the final three months showing the slight dip.

Meanwhile, the average broker premium increased at a slightly faster rate during the second half of 2007.

“Broker prices may have remained low in order to compete with online prices, but this can only be sustained for so long and prices started to creep back up in 2007,” said Avis Easteal, managing director of Experian's insurance services division.

“The last six months have revealed a more rapid increase as they attempt to move closer to online levels.”

Easteal added that, with the increased chance of road accidents at this time of year, coupled with the problem of uninsured drivers, he believes the average premium will be affected into 2008.

“Furthermore, the true impact of the floods earlier in 2007 is yet to manifest itself fully in insurance premiums,” Easteal added.

“As claims are being settled, we are seeing premiums begin to increase.

“However, the increase is slow and it is worth bearing in mind that consumers will also be aware of the imminent price increases and will start shopping around for a cheaper quote.”