An insurance firm has speculated that insurance costs will go up this year because of the credit crunch and the number of natural catastrophes in 2008.
Consumers may see the price of insurance increase in 2009 as a knock-on effect of both the credit crunch and the natural disasters which struck last year, according to a Lloyd's of London insurer.
Amlin revealed in a trading statement that its gross written premium was £1.02 billion in 2008, lower than the £1.04 billion it recorded the year before. However, it predicted that 2009 will see the decline halted, as the financial and natural problems that the world faced last year have "started to drive firmer reinsurance rates".
Charles Philipps, chief executive at the company, commented: "We are through the bottom of the insurance cycle, with strong prospects for hardening rates across our business."
The credit crunch has meant that many firms which may have felt invincible now realise that they are vulnerable, he explained. Investment bank Lehman Brothers went bankrupt during the crisis, while a number of the UK's largest banks received government assistance in a £37 billion bailout package later in the year.
Mr Philipps explained that this will lead to a more disciplined approach to pricing, as companies seek to avoid going to way of the giant American insurer AIG, which collapsed last year.
Consumers could well see this rise in prices reflected in a range of insurance products.
