Scale of unrated Alpha collapse emerges
Thousands of cabbies are unable to work amid the collapse of unrated Danish insurer Alpha.
Up to 700 taxi drivers and 10,000 minicab drivers are affected, the Licensed Taxi Drivers Association said.
And until those drivers have secured new cover, they will not be able to work.
Biba described it as a ‘very serious situation’.
Cover My Cab and Protector are the Alpha-backed brands used by cabbies for insurance.
Marci Moroney, a black cab driver who was in the queue outside the London’s Protector offices, said he received a text saying he was no longer insured while he was working last night.
“I think this is one of the worst situations they have put us in… I had to stop work last night and now I’ve lost two days money,” he told the BBC.
A spokesperson for the Association of British Insurers said all cab drivers should “double-check which firm is responsible for their policy so they can be confident they have the right cover in place”
Alpha’s collapse reasons
Danish insurer Alpha troubles happened because it was connected to a web of unrated and weakly-capitalised insurance companies that fell into their own problems.
Alpha was reinsured by New Zealand insurer CBL Insurance Limited.
CBL collapsed after a crack down by regulators in Ireland and New Zealand.
CBL was insuring French construction business, and at one point, had ‘less than zero’ capital solvency, according to regulators.
When CBL went down, the reinsurance for Alpha left a hole in its balance sheet so large it eventually declared bankruptcy.
CBL had originally partnered as the quota-share reinsurer for unrated Gibraltar-insurer Elite to underwrite French construction, which also fell into troubles amid reserving issues.
Elite’s problems triggered the chain of events as the Gibraltar regulator tipped off other national regulators about CBL’s situation, which then led to the CBL collapse and eventual Alpha bankruptcy.
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