THE dire predictions of higher motor insurance premiums have yet to come true and the opposite seems to have taken place, with at least one Singapore insurer in the Big Three actually cutting its rates slightly for new policies.

In late March, the General Insurance Association of Singapore (GIA) warned motorists at its annual general meeting to expect premium hikes because half of the 30 motor insurers were losing money on their portfolios after engaging in a price war.

The motor insurance industry had gone back into the red after registering an underwriting loss of $625,000 in 2006, from a $46.3 million profit in 2005.Gross premiums in 2006 had risen 1.4 per cent to $692.7 million.

The GIA continued to warn about rising premiums last week after the first quarter of 2007 revealed the motor portfolio's 'alarming' $13 million underwriting loss, compared with profit of $11 million in the corresponding period in 2006.

According to research estimates, American insurer AIG is keeping the same rates for new car policies, although policies renewed after April have risen by an average 10 per cent, compared with 12 months ago, because of the withdrawal of last year's promotional discounts. AIG is Singapore's No 1 motor insurer,with a 24.7 per cent market share in 2006 in terms of premiums.

A 32-year-old male with no NCD (no claims discount) buying a new Toyota Corolla 1.6 is likely to have to pay about $1,690 for his AIG insurance.

French insurer AXA has also not increased its premiums this year. The No 3insurer had a 13.6 per cent market share in 2006 and chief executive Patrick Font said there are no plans to increase their premiums for the time being.

'Our pricing is being fine-tuned regularly, according to our normal underwriting practices,' said Mr Font. 'No across-the-board adjustment has been made so far this year. Overall, our average premium is still on the decreasing trend compared to last year.'

In the same 32-year-old motorist's case, the estimated AXA premium is expected to be about $1,580.

As for NTUC Income, research estimates put its average premiums at 5 percent lower than a year ago.

The No 2 insurer said 'maintaining stability in our premium rates is important to our customers and central to running Income along sound financial lines'.

'We will continue to keep our premium rates affordable and competitive by capitalising on our leadership position in keeping our claims expenses low,'said Freddy Neo, general manager of NTUC Income.

He added that it is Income's practice to review its motor premiums every six months and premium rates are fine-tuned according to the experience of the risk factors.

'We have no intention to make an across-the-board premium increase in the coming premium review,' said Mr Neo.

Using the same insurer profile as above, an Income policy is now about$1,700 if the policy-holder wants to use the authorised distributor's workshop for repairs. But if that condition is dropped, the policy is only $1,360 - also5 per cent lower than a year ago.

But Income, which has a market share of 24 per cent, is in a different position from AIG and AXA. The homegrown insurer used to be numero uno before AIG overtook it in the last quarter of 2006 to lead by a wafer thin margin -$171 million vs $170 million in 2006 gross premiums.

While the two foreign insurers posted gains in market share last year,thanks to tie-ups with car distributors, Income saw a decline of more than five percentage points.

But Income has indicated that it will not be taking it lying down, with chief executive Tan Suee Chieh saying he aims to regain the top ranking.

This is unlikely to be achieved if its premiums are not competitive.