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The insurance industry is only able to make money in the wealth sector because of the money that it pulls in from compulsory motor insurance premiums and the steady cash flow that results.

Working on the average premium being £1,000 as it is convenient; if an insurer writes 100 new premiums per week, which is £100k of revenue.

If 50% is invested, 15% pays overheads, 25% is put in the claims pot and 10% set aside for contingencies; that means £25k in the claims pot and £50k to invest.

Imagine the return that £50k investment per week would yield. Some of it will be used to top up the claims pot and the remainder is pure profit and shareholder dividends

The profit may not come from premiums when assessed against claims paid out, but it is the cash flow generated by compulsory motor insurance that creates the opportunity for the profit to be made.

The numbers are basic, but you understand the idea.

The insurers pay the best actuaries that money can buy to ensure that their margins and risk are suitably tailored for maximum profit.