MOTOR insurers are demanding action in Hongkong and on the mainland to help combat soaring car thefts, which cost them more than $1 billion last year. The Accident Insurance Association of Hongkong (AIA) yesterday backed the claim by announcing a record car insurance loss for the industry of $557.6 million last year - a 154 per cent increase on the $219.1 million in 1991. More than 1,000 of the 1,849 cars stolen but not recovered last year were in the luxury bracket, according to industry figures, with Mercedes-Benz and BMW models being particularly popular. Many of them are believed to have been smuggled to China. Increased insurance premiums were ''unavoidable'', the AIA warned, if the situation did not improve soon. AIA chairman Mr Nick Helms said the organisation was behind a proposal for the Government to set up a joint committee made up of representatives from the Security Branch, police, customs, motor traders and manufacturers, the Automobile Association, and Consumer Council to examine how the record losses could be reduced. The Secretary for Security, Mr Alastair Asprey, had initially rejected the proposal but was now ''looking into the idea'', Mr Helms said. But the Commissioner of Police, Mr Li Kwan-ha, last night emphasised that a special committee would not serve a significant purpose. The police had devoted resources to preventing the theft and smuggling of vehicles, but, he added: ''Which is more important - [stopping] firearms and robberies, or car thefts?'' The insurance industry figures did not include losses incurred by owners who were uninsured or companies who were not members of the AIA or the General Insurance Council. ''When considering these factors, losses can be estimated to exceed $1 billion for 1992,'' Mr Helms said. ''I would hazard a guess that Hongkong would be, per capita, the worst in the world for car crime.'' The association contacted the New China News Agency last October and asked for its help in a campaign to make the smuggling of stolen cars in Hongkong a less attractive proposition. ''We would like to see the Chinese authorities significantly reduce their 300 per cent duty on all new cars. It is this levy which creates a great demand for luxury cars stolen in Hongkong.'' Official AIA figures showed that the September-December period was a record quarter for car thefts. A total of 664 cars were stolen at an estimated loss of $196.5 million - against $83.3 million for the same period in 1991. Top target for car thieves last year was Mercedes-Benz models, with 714 being stolen. Only 59 cars were recovered. BMWs were second on the hit-list, with 443 disappearing. Just 36 were found. Next came Toyotas, with 439 stolen (42 recovered), Hondas, with 272 stolen (76) and Mazdas 102 (16). Deputy Secretary for Security Mr Ken Woodhouse said he welcomed the multi-organisational approach but felt any committee should be organised informally under the auspices of the police. ''We suggested bringing in those who do not meet regularly on an ad hoc basis. If everyone feels that somebody from the branch is necessary, we would be more than happy to be involved,'' he said. Hongkong Automobile Association chairman Mr Phil Taylor said that while he welcomed any talks on the subject, he did not believe the Government was taking the initiative. ''The Hongkong Government is in receipt of $600 million extra revenue for new vehicles being re-registered as replacements for stolen cars. They are getting this extra revenue and don't seem to be doing anything on the issue,'' he claimed. ''Police need extra resources and the Government should be putting back some of that $600 million to increase police manpower.'' He added that some insurance companies in the territory had been increasing the amount of excess fees for the past 12 months. ''We are not talking about this happening on the odd occasion. We have received about 400 complaints about this from motorists. Insurance contracts have a lot of small print and many people don't actually read it, so when a company tells them just a few weeks into a policy term that they are going to have to pay more, they are understandably angry.'' Mr Taylor added that if the companies were to continue raising excess fees during the life of policies, he would consider calling on the Government to intervene. Mr Helms admitted that motorists with policies on luxury models could be forced to pay increased excess fees if their cars were stolen or damaged. ''We do not condone this procedure and have sent out a circular asking our members to make alternative arrangements rather than increase terms or cancel policies midway through their contract.'' All contracts allow companies to raise the excess - the amount a customer has to pay before the insurer becomes liable for costs. The company has to give a week's notice if it wants to change the figure, which is usually about 10 per cent of the total premium. Mr Helms said the AIA had asked companies to highlight the need for customers to install alarms on luxury cars. However, 12 motor vehicle underwriters had already withdrawn from supplying motor insurance, and he expected more to follow suit. ''This will mean less competition and it will be harder for the customer to get a competitive rate.''