UK motor insurance premiums increase - survey

July 11 (Reuters) - The cost of British car insurance rose 6.5 percent in the second quarter compared with the previous three months, website Confused.com said, with the increase blamed on higher prices for repairing more complex vehicles.

The cost of an average comprehensive motor premium rose to 715 pounds ($928) in the three months to the end of June, data from price comparison website Confused.com and consultants Towers Watson & Co (NasdaqGS: TW - news) showed.

The rise comes after rates held steady in the first three months of 2016 as price cuts in January balanced out a recent rise in insurance premium tax.

FTSE 100 firms such as Aviva Plc (Other OTC: AIVAF - news) , Direct Line (Other OTC: DIISD - news) Insurance Group Plc and RSA Insurance Group Plc are among those operating in a crowded car insurance market.

Older drivers had seen the biggest increases in car insurance premiums, said Stephen Jones, UK head of P&C pricing at Willis Towers Watson. The increase was driven by inflationary pressures on claims costs, especially on vehicle damage repair costs, he added.

"... what is contributing to premium increases are the cost and complexity of repairs, particularly as cars are fitted with more expensive technology," Jones said.

The cost of a comprehensive policy rose 19 percent, marking the biggest annual rise recorded by the index since 2011.

Steve Fletcher, head of data services at Confused.com, said average comprehensive premiums could surpass the peak of 858 pounds seen in 2011.

"This, combined with rising fuel prices and increased motoring costs across the board, could result in a sizeable dent in drivers' pockets," Fletcher added. ($1 = 0.7704 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Keith Weir)