Drivers are paying more for their car insurance due to insurers' own costs – and youngsters are the hardest hit, it has been revealed.

Brokers have put the rising costs down to increasing concerns by reinsurers over the way in which people are being compensated for accidents.

Reinsurers offer "insurance for insurers", by taking on the risks of the insurance firm which has a direct contract with the customer.

Crash payouts are having an impact on car insurance premiums, with the AA saying drivers between the ages of 17 and 22 are facing an average premium of £2,792.

Broker Willis Re said UK motor insurers which had big enough losses to trigger reinsurance payouts saw rate increases of 35 per cent and upwards on policies which took effect from January. Those which did not rely on reinsurance payments faced rises of 20 per cent to 30 per cent.

The Financial Times reported that the knock-on effect for UK policyholders could be a three per cent to 10 per cent premium rise, according to some estimates, which would mean hundreds of pounds extra for some drivers.

Willis Re said that larger, more serious bodily injury claims are increasingly being settled by periodic payment orders (PPOs), which are paid at regular intervals over the lifetime of someone who has been injured, rather than a one-off sum.

The added cost pressures come at a time when young female drivers in particular are already predicted to see their car insurance premiums shoot up, after European rules came into force last month.

Young women are forecast to be among the worst affected due to the comparatively high accident rates of young men.

Peter Harrison, car insurance spokesman for comparison website MoneySupermarket, said: "Any additional cost won't go down well and I'm sure that cost will be passed on."