HIBERNIAN Group has warned that its motor premiums will have to rise, as it reported that rising accident claims contributed to a sharp 17 per cent fall in operating profits to £11.2 million in the first six months of the year.

The group said yesterday that the increasing frequency and cost of motor accident claims meant its premiums would increase. Young male drivers, in particular, will face the biggest premium increases, according to chief executive, Mr Adrian Daly. "We will be looking at rates over the next two to three months and will add increases where appropriate," he said yesterday.

But any price increases will be introduced "selectively" he stressed, with older motorists and women drivers unlikely to see any rise in motor premiums when renewing their policies.

As Garda statistics continue to record a rising number of road fatalities and injuries this year, Mr Daly said the bulk of the growing number of claims were from young male drivers. These motorists will ultimately have to bear the brunt of any increase, which could mean their premiums rising by up to 10 per cent, he said.

Given the aggressive price cutting, prompted by the growing number of direct motor insurers operating in the Republic, Mr Daly said market rates now "need to go up" for motor insurance to be a viable line of business.

As a result of the rising number of claims Hibernian's half year figures issued yesterday show a worsening underwriting performance.

In the first six months of 1996 the figures show that underwriting losses rose from £6.9 million to £10.2 million. Its overall operating profits were also reduced by lower income from its investments over that period. Income from its investment portfolio, predominantly made up of Government gilts, was down from £17.6 million to £17.5 million, due to exceptionally low yields.

The group, which includes Hibernian's life and Pensions business in the Republic and the UK Showd a marginal drop in income from motor insurance and other non-life assurance business from £111.3 million to £110.9 million. Its core life assurance business, however, showed good growth with income up from £32.2 million to £35.5 million over the six months.

Losses at its UK operations also rose substantially over the six month period from £0.5 million sterling in the same period last year to £1.34 million. Most of the deterioration was due to claims for property damage following bombs in London and Manchester of close to £0.5 million, it said.

Gross written premiums in the UK however ran slightly ahead of the 1995 levels from £16.4 million to £20.8 million.

The group also saw a sharp drop in written premiums from its reinsurance operations, down 39 per cent to £4 million. Its operating for the half year were £1.8 million.