Motorists' wallets are expected to be given some respite this year after several years of escalating car insurance premiums.

There will be no more major increases in the cost of motor insurance during 2002, according to market analyst Datamonitor.

Motoring facts

24.5m cars on the road 32.3m licensed drivers in the UK 53% increase in cost of comprehensive motor cover over last three years

The prediction follows three years of dramatic price rises, which have seen the average cost of a comprehensive policy climb to more than �670.

Over the last few years, insurers have pushed up the cost of premiums to recover from heavy losses in the mid-1990s.

As the industry returns to profitability, Datamonitor said there would be less need to raise prices.

Rising premiums

Consumers have experienced a 53% rise on average in comprehensive cover over the last three years.

Gone are the days of fierce price-based competition, with low rates for car insurance

Liz Hartley, author of report

Those paying for non-comprehensive cover are now paying on average a massive 78% more.

The price increases followed a �959m industry loss in 1998.

Pushing up prices has proved lucrative, reducing the industry's deficit to a loss of �638m in 2000.

The sector is expected to return a modest profit in 2002.

Despite this welcome news for consumers, Datamonitor said there would be little chance of returning to the cheap prices enjoyed by motorists a few years ago.

Liz Hartley, author of the report, said: "Gone are the days of fierce price-based competition, with low rates for car insurance, meaning that consumers are unlikely to ever again enjoy the low premium prices of the mid-nineties. "