CGNU, the UK's largest general insurer, insures one in four vehicles in Britain and last year was forced to push up premiums by 14% on average.

CGNU says that drivers will face another 10-15% increase this year, largely because of spiralling personal injury claims which now make up a third of the cost of insuring a car.

On a pre-tax basis the company slumped to a loss of £1.4bn in 2000 from a profit of £1.5bn in 1999, after provisions of £1bn on the sale of its US insurance business and a £448m to exit from Lloyd's of London. Operating profit on ongoing business, used by analysts as a clearer indication of current trading, was down by 8% to £1,407m from £1,534m.

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