This perversion of competition could lead to the failure of insurers to pay out claims and reputational damage to the wider UK insurance market. The collapse of a large insurer would also lead to higher prices for new consumers. This is because the Financial Services Compensation Scheme would need to be replenished by the surviving firms, who would in turn pass on these costs to their customers. Robust prudential standards underpin the sustainability of the fund and reduce the potential need for taxpayer funds to compensate policyholders following a failure, as we have seen in the past. I am not therefore persuaded of the case for giving a primary competition objective to the PRA. This would likely require the PRA to pursue competition as an objective in its own right and enable it to use its powers for that purpose alone. It's difficult to say what specific activities this would entail for the PRA. Potentially, the PRA would be given the same competition powers that sit with the FCA, allowing the PRA to undertake market studies with a view to introducing new rules with the specific aim of promoting competition. Given the potential for overlap with the FCA and the CMA, which both have specific objectives to promote competition, I would be wary of taking this route. Our secondary competition objective refers to competition, not competitiveness. This is an important distinction. Competitiveness is usually taken to mean a firm’s ability to compete on cost or quality grounds.
Second, we need to maintain high standards of safety and soundness for UK insurers – not primarily for financial stability reasons, but in order to ensure an appropriate degree of protection for policyholders. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9