Mounting losses in the auto insurance business have led a number of major companies to stop selling auto, and indeed, all kinds of property and casualty insurance, to individuals, a trend that is expected to continue.

As a result, consumers will find themselves with fewer options when shopping around for their personal insurance needs, as more of the auto insurance business becomes concentrated in the hands of a few major national insurance companies. These companies include Washington-based Geico, Allstate Insurance Group, Northbrook, Ill.; State Farm, based in Bloomington, Ill.; and United States Auto Association of Houston.Consumers also may find less diversity in the types of auto insurance they can buy and less price competition among the companies that are still in the business, industry analysts said.

In the past few weeks, Travelers Insurance Co. of Hartford, Conn., Philadelphia-based Cigna Corp., and the New Hampshire Insurance Group, a unit of American International Group of New York, have all announced plans to withdraw from the personal insurance market.

Aetna Life & Casualty Co., also of Hartford is scaling back its automotive coverage but has not withdrawn from the market. It has ended sales of health insurance to individuals but will keep servicing existing customers.

In 1988, insurers took in $68 billion in auto insurance premiums, but their losses and expenses during that same period totaled $72.5 billion, according to A.M. Best's Aggregates and Averages for 1989.

As a result, insurers will shift their focus from individual insurance policies, which require a lot of back office work, and concentrate on commercial insurance, which makes them more money, analysts said.

Analysts believe that a number of other insurers are getting ready to make the same move.

"If you're not making any money, there's no reason not to hand this business over to someone else," said Herbert Goodfriend, first vice president with Prudential-Bache Securities in New York.

A major reason companies are not making money are the rate limits that are being put on auto insurers by regulators, he said. These limits, which are below what insurers say they need to make a profit, are in response to the public outcry for more affordable auto insurance premiums.

Proposition 103 in California was the first shot fired in this battle, and it has been followed by similar legislative auto insurance rate-rollback proposals in about a dozen other states around the country.

The high cost of auto insurance also has been cited as a major factor in

helping James Florio win the governor's race in New Jersey, one of the highest-cost states for both insurers and motorists.

The North Carolina insurance commissioner recently told Donald Kramer, chairman of Kramer Capital Consultants, Greenwich, Conn., that his goal is to keep North Carolina auto insurance rates just above the level needed to keep auto insurers from going bankrupt.

For a line of insurance that many companies write only as a convenience to their commercial insurance consumers, it is not worthwhile to accept these regulatory burdens and losses, said Mr. Kramer.

This is especially true since insurers have been steadily losing this market to direct writers, such as State Farm, Ussa and Allstate, over the last few years anyway, he said.

Consumer activists, as well as some legislators and industry regulators, contend that insurers are not losing money on auto insurance because of the investment income they earn on the premiums consumers pay.

Insurance companies argue that those people pushing for lower rates fail to take into account such factors as the rising cost of repairing automobiles and rising medical costs, factors over which the industry has no control, said Ken Hacker, public affairs manager for the American Insurance Association.

Regulators and consumer advocates are forcing insurance companies to offer auto coverage at below cost in order to solve the growing problem of people who cannot afford to purchase auto insurance, said Harry Fong, an analyst with Conning & Co. The best way to solve this social problem in the long-term may be for states to provide this insurance for their residents, he said.

Patricia Borowski, director of government and industry affairs for the National Association of Professional Insurance Agents, is not quite as pessimistic. She believes there are insurance companies that can do well in the personal lines market, even the auto insurance market, if they make the full commitment to this part of the business. That commitment, though, means providing full service to agents and to consumers, she said.

Some consumers may face problems in finding new auto and home insurance carriers because companies staying in the market are going to be selective about the new policies they accept, said Ms. Borowski.

Some, especially those who live in crime-prone urban areas, may find themselves in state-run insurance pools. Premium rates in these pools, meant for those with a high risk, are much higher than private insurance.