Hunt is on for remainder of collapsed unrated insurer’s policyholders
Thirty per cent of failed insurer Alpha’s customers are yet to be traced so they can be compensated, Insurance Times can reveal.
The Financial Services Compensation Scheme told Insurance Times that to date it has only managed to compensate 70% of Alpha’s customers following the unrated Danish insurer’s collapse in May 2018.
The FSCS started paying out to Alpha customers last summer.
When asked what lessons had been learned from major insurance fallouts, Jimmy Barber, chief operating officer at the Financial Services Compensation Scheme (FSCS) told Insurance Times the big learning from the failures that it has experienced has been the quality of data from the companies that it’s has dealt with has been poor.
For example, following Enterprise’s collapse it took the FSCS nearly two years to pay out all of the motor policies that Enterprise held.
“A lot of the time the brokers could not tell us who the insured was,” he added.
This is because with most cases brokers had sub-broked in therefore there was a big chain of people to go through to get the information that was needed to locate the customer.
Sub-broking is where a broker is used by another broker.
Being prepared
“One of the pillars we had was ‘being prepared,’ and so it is incumbent for us to look at when things go wrong how we do things better next time to benefit customers and our levy, and doing that more efficiently, Barber continued.
“Certainly, with Enterprise and Gable we identified ways of working with the actual failure itself, things like – how do we communicate and update customers? How do we work with the regulators and insolvency practitioners in Gibraltar to make sure customers understand what is really going on?”
FSCS hopes to locate these customers and raise its profile as not enough customers know about the UK’s statutory deposit insurance and investors compensation scheme.
No comments yet