Aviva has sold its RAC business for £1bn to Carlyle Group, the private equity firm, as the insurance giant focuses on its main savings and insurance operations.

New laws to crack down on uninsured drivers take effect today with offenders facing the possibility of having their car destroyed.

Motorists are facing further hikes in premiums as insurers try to recoup huge losses racked up last year, a new report claims.

There were renewed signs of consolidation activity in the Lloyd's of London insurance market yesterday after Novae said it was studying the possibility of a merger with rival group Omega.

Life insurance payments will be made within four weeks rather than taking up to four months, under new guidelines published yesterday by the insurance industry.

Lloyds Banking Group, Britain's biggest provider of payment protection insurance, is setting aside £3.2bn to settle hundreds of thousands of cases of mis-selling of the heavily criticised policies. In a victory for financial campaigners, the Government-controlled bank hoisted the white flag in the long-running PPI scandal and announced it was pulling out of a court challenge against a regulatory crackdown and would pay out in cases of mis-selling.

Car insurance premiums have soared by a record 40% during the past year as high levels of fraud and personal injury claims continue to push up the cost of cover, research showed today.