Insurance companies calculate their premiums by analysing the statistical data of the people who have made claims for insurance. This data has shown that as people get older, they tend to be more likely to make a claim. This means that as you get older, you become more risky to insure. As such, premiums increase to reflect the higher level of risk the insurer takes. These increases in stepped premiums will generally be exponential (as seen in the diagram below) until the insurance expires. However, several other factors will affect premiums and how much you pay for cover. These are discussed further below.