Thousands of customers of the collapsed Gibraltar-based Enterprise Insurance company are to receive compensation from the Irish firm that sold the policies here.

Enterprise Insurance, which has around 14,000 customers in Ireland, was declared insolvent on Friday.

In a statement this afternoon, Wrightway Underwriting which is owned by Zurich Insurance, said they have decided to make a payment to the Irish motorists affected by the collapse of Enterprise. 

Working with the Irish Brokers Association, the company said the ex gratia payments would be made to brokers to pass on to the affected policyholders.

The sum will amount to the value of the premiums from now until the end of the customers' policy. 

"Wrightway's action will ensure that policyholders receive a payment to put towards the cost of replacement cover.

"With the benefit of this ex gratia payment, brokers can seek out alternative insurers of their choice for affected policyholders," the statement said.

The Wexford-based company said they will work closely with their brokers over the coming days to resolve the situation for the affected customers.