The cost of car insurance has risen by up to 5 per cent over the past year and £3bn of property insurance claims from this summer’s flooding could have a knock-on effect on motor insurance prices, Admiral’s chief executive said.

Henry Engelhardt, announcing a 26 per cent increase in interim profit, said motor premiums had risen by 4-5 per cent in the 12 months to June – in line with claims inflation – and he expected this trend to continue.