However, it has no plans to seek a creative shop for the venture, which comes from the same stable as Esure, whose ads featuring Michael Winner are produced in-house.
Backed by Halifax Bank of Scotland, First Alternative is being spearheaded by Peter Wood, the founder of First Direct, who is also the chairman of Esure.
While Esure targets low-risk drivers with a no-claims bonus of four years or more, First Alternative will focus on the riskier end of the market such as sports car drivers or those with motoring convictions.
Esure's media buying is currently handled by Media Planning Group but First Alternative wants to involve other media agencies in an effort to maintain differences between the brands.
Esure currently spends about £11 million on advertising although this figure is not expected to be matched by First Alternative.
Wood has been an outspoken critic of agencies but although the Esure ads, which Winner wrote and directed, have been much derided, they are claimed to have raised Esure's brand awareness by 26 per cent.
In July, First Alternative appointed the Esure marketer Andy Brown as its head of marketing and corporate analysis. His brief is to develop a strategy to target the high-premium market.