“In many respects incidents such as these highlight the importance for general insurance to safeguard against unforeseen events. This will also serve as a reminder to consumers of the need to understand the fine print of their policies.
“While there is a lot of speculation about what the total cost to the insurance industry will stand at, the reality is that it will take some time to get an accurate figure. While it will certainly be a significant number, the industry is in a position to be able to bear this cost.
“With regard to future pricing, it is unlikely that we will see overall premiums increase immediately as a result of the riots. However there can be no doubt that underwriters will focus on inner city risks and will review their premium rating for such locations. Hence, retail businesses and homeowners in central locations could see some adjustment in their premiums.
“Many high street brands have suffered major losses during the riots, which have come at a time when their businesses are already under pressure. As a result we could see increased usage of risk management tools such as captive insurers whereby retailers establish their own ‘in-house’ insurance companies for the purpose of covering their own assets. This will protect profitability for these retail businesses at the very time that it is needed and will have the benefit of reducing the impact of any short term change in the cost of insurance.”
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Notes to editor
For further information please contact
Monica Fiumara, Senior PR Manager, KPMG
Tel: +44 (0)20 7694 5674
Mobile: +44 (0)7901 105180
Email: monica.fiumara@kpmg.co.uk
KPMG Press Office: 020 7694 8773
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
