"There is a very obvious cycle that you can see in the market where if there is not much capacity, there aren't many providers in the market - insurers will put their prices up and be quite profitable," Mr Dieppe commented.
"The chances are that five years ago the market was profitable and businesses weren't getting quite the best deal. Recently what we have seen is lots of new providers being attracted into the market.
"Particularly in 2005 there were a couple of companies who entered. They need to build up business quite quickly so they start to undercut others and then existing insurers have to bring their prices down either to win or to retain business," he added.
"So that's what happened over the last few years. There has been a price war."
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