UK car insurance prices edged up in 4th quarter -AA

LONDON, Jan 20 (Reuters) - UK car insurance premiums rose 0.2 percent in the fourth quarter, the second straight quarter of gains, roadside recovery service the AA said on Tuesday, with rising personal injury claims underpinning prices.

The average quote for an annual comprehensive car insurance policy rose 0.2 percent to 540.26 pounds ($818), the AA said in a statement.

This follows a 1.2 percent rise in the third quarter, the first quarterly rise in three years. Premiums remain down 10 percent on the year, however.

Rising personal injury claims meant current prices were "simply unsustainable", Janet Connor, managing director of AA Insurance said in the statement, adding prices could rise 10 percent this year. "The underlying trend is upward."

Car (HKSE: 0699.HK - news) insurers have been cutting premiums to adjust for government reforms that came into effect in April 2013, intended to curb fraudulent and exaggerated claims, particularly whiplash injuries.

However, the AA has previously said claims management companies and law firms may have found loopholes around the reforms as many insurers have reported a surge in lower-value 'cash for crash' claims, where people deliberately brake to cause a vehicle to crash into the rear of their car.

Insurers such as Admiral and Direct Line's share prices have risen 8 percent and 3 percent respectively in the past 10 days after a rival price index from Towers Watson showed a 2 percent rise in car insurance prices in the fourth quarter.

($1 = 0.6602 pounds) (Reporting by Carolyn Cohn and Richa Naidu; editing by Susan Thomas)