Premier Insurance Company Limited, a Gibraltar-based car insurance provider, has entered administration as of October 14, leaving around 16,000 UK policyholders at risk of being uninsured.
The Financial Conduct Authority (FCA) is urging all Premier Insurance customers to secure alternative motor insurance as soon as possible.
“To avoid future potential claims not being fully covered, customers of the firm should consider securing alternative motor insurance as soon as possible,” the FCA said. While current policies remain in force for now, there is a risk that some claims may not be paid in full, depending on the type of cover held.
The Gibraltar Financial Services Commission (GFSC) confirmed the appointment of Freddie White and Bradley Chadwick of Grant Thornton as joint administrators following an application to the Supreme Court of Gibraltar.
The Financial Services Compensation Scheme (FSCS) has also declared Premier Insurance in default and is working with the administrators to protect eligible policyholders. Sarah Marin, chief customer officer at the FSCS, said the organisation is working closely with Grant Thornton (Gibraltar) to ensure all eligible UK policyholders are protected.
She added that the FSCS will also protect eligible firms with an annual turnover of less than £1 million, and that claims will continue to be considered under the terms of existing policies.
Premier is wholly owned by Premier Underwriting Holdings (Gibraltar), authorised by the GFSC, and subject to limited regulation by the UK’s FCA and Prudential Regulation Authority (PRA). Premier specialised in car and van insurance for UK customers, focusing on a niche segment of the market.
The company’s entry into administration follows several years of financial difficulties. As per its AM Best ratings, Premier reported after-tax losses of £6.2 million in 2022 and £4.3 million in 2023, which eroded its capital base.
Rising claims costs, inflation, and delays in claims settlement put further pressure on the business. Attempts to stabilise the company through rate increases and reducing non-core business lines were not enough to reverse the losses.
Premier also faced issues with its claims handling process and had to increase its technical reserves, reflecting uncertainty in claims settlements. A change in the claims management system led to data quality problems and further settlement delays.
The company’s small scale and concentrated risk profile also made it vulnerable to adverse claims trends, and capital injections from its parent company were not sufficient to offset ongoing losses.
By January this year, Premier had stopped writing new policies, entering run-off mode and further straining its liquidity. The inability to generate new premium income, combined with mounting liabilities, ultimately led to the decision to enter administration.
The FCA and FSCS have clarified that this situation relates only to Premier Insurance Company Limited and does not affect Premier Underwriting Limited or other similarly named UK-based firms. Policyholders are advised to contact their existing broker with any questions about their cover or claims.
Anyone insured with Premier Insurance should arrange new motor insurance immediately to ensure continuous cover and avoid being left uninsured. Eligible customers are protected by the FSCS, which will continue to process claims according to policy terms, but not all claims may be paid in full.
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