Since the announcement of Danish insurer Alpha Insurance's liquidation earlier this week, the trade has been in upheaval. Our clients have been contacting us to check whether their policies were affected, and we have received thousands of calls from Alpha Insurance customers needing a new policy. In this article, we try to answer the questions we have received.
I am a Plan Insurance Brokers policyholder - Am I still insured?
Absolutely. We don't have any policy placed with Alpha Insurance so our clients have not been affected. If you also hold other policies sold by other brokers, though, you may want to check who the underwriter is and confirm that you are still covered.
I had a policy from Alpha, what should I do?
The first thing to do is to arrange an alternative policy ASAP. We can help you get the cover you need, simply fill in a quote on our website, request a call back or give us a call at 0800 542 2743.
I have read that it was very risky to use unrated insurers, is that true?
No, it isn't. Ratings are in essence an assessment of an insurer's financial stability by a third party. Ratings can change (typically, CBL, the company doing the reinsurance for Alpha, was A rated and lost their rating only a few days before being put in liquidation), and they vary from one agency to another. What's more, getting rated costs a significant amount of money, which is why often, smaller insurers who wish to keep their running costs low cannot justify the added expense of going through a rating process when there is little benefit to them in terms of their ability to attract business. We have written a dedicated article regarding unrated insurance which you can read here.
What is the FSCS?
The FSCS, or Financial Services Compensation Scheme, is a body that protects consumers when authorised financial services firms fail. In Alpha's case, unfortunately, as the insurer was in Denmark, the customers wishing to claim some money back would have to go to the Danish Compensation Scheme instead, which may prove difficult. The UK's FSCS is in talks with the Danish scheme, though, so hopefully they will be able to help the drivers affected in this instance.