Mr. Kevin Thompson:

If one looks over any time horizon one will come up with a certain profitability figure but this runs in cycles. In the late 1990s there were no profits but high premiums. Insurers and consumers were suffering. Then we saw the birth of the Injuries Board, reforms went through, profitability was restored to the sector and there was a 40%-plus decrease in premiums. Companies and consumers benefited. There is now a hardening of the cycle again, we are back into a lack of profitability and we have seen the stresses on the premium rates again. It is in the consumer’s interest to get the market players back into profitability. If profitability is brought back into the sector, there is an advantage to consumers because there is a widening of capacity and more risk appetite in the sector in terms of taking on the risks the Deputy has talked about.

It is in our interest to get the profitability back. I do not believe there will be super profits out of any of this. As we have seen in the past, and we are no different from any other market, new players will enter. That is an important point. Compared with the UK, the insurance sector here is no different from any other sector, whether the farming sector or whatever. We are in an open economy. We do rely on capacity being brought into this country to service the market, unlike the UK which is a self-sustaining market. There are 300 plus insurers there. It all works. They do not need that level. It is the biggest insurance market in the world. Profitability is not a bad thing. If we get it back to profitability, we will attract new entrants. That releases capacity and consumers benefit. These things run in cycles.