WITH pressure building up for motor insurance rates to increase, Hibernian Group's results, out today, will be another important barometer of what is in store for motor insurers. Already other companies have warned about possible rate increases because of a worrying trend in motor accidents.

Hibernian, the second largest motor insurer, with around 3 per cent of the market, is likely to indicate that its rates are also pointing upwards. However, the increases which could he up to 10 per cent are not imminent. The market, in general, is looking to the latter part of this year or early next year, for a movement in premiums. The market leader, Guardian PMPA, with 40 per cent of the market, is likely to set the tone.

Hibernian suffered from a slowdown in the sales of its motor insurance policies (and life) in 1995. It allocated £4.5 million in an attempt to improve sales this year and in 1997.

A new "repositioning" strategy includes an aggressive marketing campaign started in May. The funds are being used on staff training, improving administrative procedures and new technology which is designed to enable staff spend more time with customers.

While there were conflicting view about the trends of motor insurance premiums earlier this year, the consensus now is more pessimistic.

Early in the year, companies were still contemplating rate reductions. Guardian PMPA, for example, was saying that the cost of motor insurance could fall from April, if other companies followed its lead. It was envisaged that drivers living outside Dublin could expect reductions of up to 4 per cent and lesser reductions elsewhere. And it did cut rates for most categories of drivers in May.

But the mood then changed distinctly cooler. In June, Eureko Ireland, the holding company for Friends Provident and Celtic International, warned that cheap motor insurance deals could not continue. Rises of as much as 10 per cent were predicted over a 12 month period. Celtic had already raised its premiums for drivers in the 27 to 30 age group.

But Guardian PMPA stressed it had no plans to increase premiums this year. "The company is transacting business at a satisfactory rate. We are making profits and there is no question that we are underpricing," is how the market leader put it. However, the company admitted that "things are tough" and that we won't do as well as last year but we are still making profits".

Then, in a turn about, earlier this month, Guardian PMPA, warned that car insurance rate could rise if the worrying increase in the number of motor accidents continued. And Garda statistics showed an 11 per cent increase in road accidents in the first half of the year.

Guardian PMPA's underwriting profits collapsed from £7 million in the first half of 1995 to break even in the first half of this year. Realised investment income fell from £18 million to £16.8 million reflecting lower interest rates, and that led to a fall in operation profits from £25 million to £16.8 million.

The motor insurance industry is being hit by intense competition with an increased number of claims for accidents and deaths and the costs of claims have been increasing.

Guardian PMPA will set the tone for the market over the next six months. Hibernian's views today will also have an important influence. Guardian PMPA has already held out a morsel of hope for the driving public saying there are no plans "at this stage" to increase premiums, but "if things disimprove further, a price adjustment can't be ruled out".

But the next move in motor insurance premiums is likely to be upwards the first adverse movement for three years.