A new report has claimed that the increase in personal injury claims could see car insurance companies' claims costs rise by as much as 28 per cent over the next five years, which could affect the cost of people's premiums.

Research by Datamonitor has found that the amount of money likely to be paid out by firms by 2012 will be near £10.9 billion, up from £8.5 billion in 2007, according to Motorstoday.com.

While the number of road traffic accidents has decreased in recent years, the increased costs likely to be incurred are down to a rise in the price of medical and legal help.

A spokesman for the Association of British Insurers said that providers were looking to control the cost of claims and the cost of premiums.

"In recent years claims costs have been rising for insurers, and one of the key factors has been rising personal injury costs. Insurance companies are looking at ways to keep claims costs under control and premiums under control," he told the site.

Datamonitor provides online database and analysis services for different industry sectors.

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