Around 16,000 UK motor insurance policyholders have been affected by the administration of Gibraltar-based Premier Insurance Company.
The company, which specialised in motor cover for UK individuals and small businesses, was placed into administration on Oct. 14, 2025, following an application to the Supreme Court of Gibraltar. The company has been facing prolonged financial difficulties, including significant losses from claims, inflation, as well as issues with its claims handling system. Joint administrators Freddie White and Bradley Chadwick of Grant Thornton were appointed to oversee the process.
In January 2025, the insurer ceased writing new business and, as part of the administration, formally terminated all remaining live policies on Dec. 1 of the same year, according to a report from the Daily Record.
In an update published earlier this month, the Financial Conduct Authority said that affected customers currently have motor insurance cover in place but cautioned that the scope of protection may differ depending on policy wording and claim circumstances. The FCA has confirmed that the policies will not be renewed at expiry, requiring customers to secure replacement cover to remain insured.
The FSCS
Eligible UK customers may fall under the protection of the Financial Services Compensation Scheme, or FSCS, although the FSCS typically covers valid claims rather than the full remaining value of a cancelled policy.
Because of the disruption, brokers are now managing a significant remediation exercise, contacting customers to arrange alternative cover and prevent lapses in compulsory motor insurance. The FCA has again reminded that everyone that driving without insurance, even for a short period, is a criminal offence, urging policyholders to act quickly, the report said.
Recent motor insurer failure
The collapse of Premier Insurance follows a series of failures among smaller and overseas motor insurers in recent years, often linked to thin capital buffers, adverse claims experience and inflationary pressures in repair costs and bodily injury claims.
In late 2021, MCE Insurance Company ceased underwriting and was declared in default by the FSCS. The move affected more than 105,000 UK policyholders.
For brokers and insurers, this event reinforces the importance of insurer due diligence, clear disclosure around insurer domicile and robust contingency planning where capacity is sourced from non-UK carriers.
Premier Insurance's administration also adds further strain to an already challenged UK morot insurance sector, where capacity remains selective and pricing pressure continues.
