Why car insurers cannot make a profit

Chris Wheal
M1 motorway traffic queue
M1 motorway traffic queue

Admiral has become the latest car insurer to announce problems. The darling of the Stock Exchange – described by one analyst as "the poster boy for the insurance industry" – it shocked the City this month by saying it had suffered worse claims than expected.

It should come as no surprise. The car insurance industry as a whole has not made money since 1994. Here's why.