British car insurance premiums fall in first quarter-AA

LONDON, April 21 (Reuters) - British car insurance premiums fell by 1 percent in the first quarter due to discounts on offer early in the year, roadside recovery service the AA said on Tuesday, following two quarters of price rises.

The average quote for an annual comprehensive car insurance policy was 530.47 pounds ($790) in the first quarter, the AA said in a quarterly statement.

Insurers often cut prices in the first quarter to attract customers, Janet Connor, managing director of AA Insurance, said in the statement.

Premiums have fallen 5.8 percent over the past 12 months, in a competitive environment for specialist motor insurers such as Admiral and Direct Line.

But claims for whiplash injury, including fraudulent claims, are putting upward pressure on prices, the AA said, because the cost of claims is greater than premium income for many insurers.

"We're starting to see insurers quoting higher prices and I think that's the beginning of a trend, but the market remains very competitive," Connor said.

($1 = 0.6711 pounds) (Reporting by Carolyn Cohn. Editing by Jane Merriman)