Car insurance premiums could rise by as much as 15% in the next 12 months, which could drive re-ratings at major insurers including Esure (ESUR).

Premiums in the £11 billion private motor insurance market have been falling for a long time because of fierce competition, but they could start climbing by the end of the year, predicts the AA (AA.).

Reforms to the personal injury market haven’t produced as much savings as hoped by insurers. The underwriters can also no longer use their reserves to undercut each other on price.

If premiums rise across the industry Esure is well positioned to benefit. Its main business is car insurance with £446.5 million of premiums on the books in 2013, eclipsing the £89.3 million collected for its home business.

Esure’s motor business, which includes the Sheilas’ Wheels brand, generated a £41 million underwriting profit in 2013, up 34.4% year-on-year, and helps reduce its combined operating ratio - its premiums compared to claims paid - to 89.7% from 92.8% a year earlier.

Consensus forecast that Esure’s pre-tax profits this year will be flat at around £117.4 million, before rising 7.5% to £126.3 million in 2015. Until then a 7.1% prospective yield, or 18.3p a share, could keep investors happy..

At 254.5p, Esure is an attractive play on any industry-wide price rise.