Note that NIG (Part of the RBS group) has pulled out of the motor and household insurance business.
The reasons why insurers lose money on motor insurance are:
1) Fraudulent proposals made on price-comparison websites by customers looking for the cheapest deals, including : fronting, non disclosure of claims or convictions, lying about where the car is kept or what it is used for.
2) Expenditure on advertising and suicidal offers.
3) Pricing below the risk rate - using up reservces hoping to be the 'last man standing' when the market recovers.
4) Fraudulent claims
5) Increasing levels of Personal Injury claims - from 1 in 20 claims a few years ago to one in four now.
Many deals are for one year in the hope that the customer will renew at a profitable rate - with price comparison websites this is now a much reduced chance however (and you heard it here first) I expect MANY insurance companies to pull out of - or offer only substantially increased rates on - price comparison websites as they seek to ensure they get correct information from the customers before they sell them a policy. It may well be that in 5 years or less the best deals (and advice) will come from insurance brokers.