Motorists have been warned that providers may raise car insurance premiums if profits continue to slide.

The credit agency Standard & Poor (S&P)have said that companies have recently experienced a drop in the number of claims – partly due to increased security and car safety devices being included as standard on most new vehicles.

This could lead to an increase in the cost of insurance premiums, to make up for loss in profits, since the cost of claims has overtaken the cost of insurance.

A report from the provider states: "It is, in our view, no longer possible for many companies to achieve their target return on capital for this line of business.

"The prior-year reserve releases that have been subsidising the financial-year results are not sustainable, in our view, and therefore it is time for motor insurers to raise prices to preserve their profitability."

It was recently reported that younger drivers are being offered cheaper car insurance premiums if they drive at certain hours of the day.

Motorists between the ages of 18 and 25 are being offered cheaper car premiums if they do not drive between 23:00 BST and 06:00 BST, since a disproportionate number of accidents occur during these hours.

Black box technology is being used to monitor drivers, to ensure they do not drive at these times.