KPMG in the UK embarked on a journey of transformation during 2013, in pursuit of our strategic goal to dominate professional services. Our Annual Review highlights how we bring real benefits to our clients, our people and society as a whole.
We are proud to be partnering with Action for Literacy and Shelter to enable us to play a greater part in tackling the key issues of literacy and homelessness in the UK today.
Reinvention of UK Banking highlights that, as the cost of remediation continues to dominate results presentations, banks face an uphill battle as they try to radically transform in a timeframe that is acceptable to all stakeholders.
Explore why technology firms should choose to invest in the UK. We consider what the UK currently has in its favour as it battles for technology investment.
Technology has revolutionised the day-to-day lives of individuals and organisations alike. But if we're to continue to benefit and to profit from it, and if we're to minimise the potential downsides, we're going to have make some choices.
We help our clients understand current issues and future trends in the world of work, and identify how they can enhance organisational performance through their people.
Explore the opportunities available for school and college leavers at KPMG.
Find out about careers for graduates from all degree disciplines in Audit, Tax, Advisory, Technology, Marketing and HR.
Keep up to date with the latest news and views from KPMG in the UK by following our twitter feed.
KPMG’s leadership blogs brings you insight, opinion and debate from our senior partners and industry experts.
The 2013 edition of our Alumni magazine, Connected, features Alumni profiles, as well as articles about Cyber Security and Tax Transparency. Regional variations for Scotland, North, Midlands and South are also available
Over 11,000 of our alumni are registered on LinkedIn. We have established the KPMG UK Alumni group to enable you to contact many of our past and current people who are members.
Fundamentally, the relationship between motor insurance companies and their policyholders is one of mutual mistrust. The public believes that insurance companies exist simply to make money; many policyholders appear to have zero moral issue with inflating their claims. At the same time, motor insurers are beset with fraudulent claims perpetuated by organised crime . As a result, application and claims costs have risen to a point that has inflated premiums for policyholders and eroded returns for insurers.
Motor insurance is the ultimate grudge purchase. What’s more, the public’s enthusiastic take-up of price-comparison websites has had the effect of eroding brand loyalty. Although brand still plays a part in terms of consumer confidence, few consumers make their choice solely based on brand. These days the majority buy on price and frequently change their underwriter.
This lack of trust on both sides is unsustainable. Motor insurers need to act if they are to re-set the insurer-policyholder relationship. Both parties need new ways of engaging with their market – through better product design, by revisiting what their brands stand for, by engaging with policyholders more effectively and perhaps learning lessons from the micro-insurance model used in developing countries, whereby all parties understand that it is the trustworthiness of the community that underpins insurance arrangements. Insurers need to build up a more credible exchange between themselves and their customer base – one that rewards policyholders for not claiming in a more substantive way than the traditional no claims bonus.
The motor insurance sector struggles with an anomaly. In a functional market over-capacity tends to drive prices down. However the opposite appears to be the case in the motor claims management industry, where claims inflation continues to rise, particularly when bodily injury claims are involved.
Insurers have experienced inflated costs across the board in recent years. This is partly because ‘at fault’ insurers have little control over the costs of the claim, and they are the ones ultimately footing the bill. It is also a result of the claims cycle being extremely complex with multiple parties be involved. In order to survive, each component of the claims cycle needs to make a margin. Given the number of ‘hand offs’ a claim passes through, with a margin being added at each stage the costs soon add up. Insurers have not helped themselves either, as the practice of receiving referral fees for passing non-fault claims onto businesses in the claims cycle also contributed to a rise in claims costs.
To date any attempts to contain this through legislation have failed. When legislation has put pressure on one part of the balloon, it has not shrunk the balloon; rather it has created a bulge elsewhere. Having said that, there are a number of regulatory and legislative interventions currently in train which, anecdotally, insurers are expressing more confidence in. In particular there is a belief that the measures being introduced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) will be more successful in reducing claims costs than previous measures. For claims costs to reduce further, or to at least halt claims inflation, there will also need to be a market response. A number of businesses in the claims cycle may no longer have the scale to make a margin out of revised cost structures, or the ability to manage the compliance challenges that are being posed by the regulatory changes. Therefore, we could be entering a period of consolidation, or further vertical integration within the claims industry. This should lead to rationalisation of the number of businesses in the claims cycle, a corresponding reduction in claim costs and a potential improvement in the quality of service provided.
The lack of a clear single information management strategy. At present Big Data is a ‘mega trend’ that Boards have a 50,000 ft view of. Few have considered granular second and third order effects. Firms should have a single information management strategy that includes the ability to manage and benefit from all data, be it, low/high volume, structured, unstructured, external or internal. Purely focussing on a Big Data strategy would dilute the benefits.
Legacy systems are often used as an excuse for not being able to use internal data effectively. Contrary to the view that firm’s need to spend money on transformation of legacy systems, a great deal of work can be done without impacting legacy systems, for example, the majority of spend in Finance Transformation has been on systems (such as data warehouses) that are downstream of the core legacy systems.
However, the key challenge when it comes to getting the most out of Big Data is having the appropriate business insight to leverage the data asset. We have seen a lot of firms storing great volumes of data and getting very little benefit from it.
There is also the fact that Firms are scared about falling fowl of complex data protection legislation. It is important to get a clear view of what they can / can't do with the data that is available to them.
Firms should not waste time waiting for a generic ‘silver bullet’ solution to be created by the market. In order to obtain a competitive advantage firms need to start thinking about their information management strategy at a granular level. Development of that strategy should not be developed by IT and data technicians in isolation; rather it should be developed in conjunction with the business insight of market and functional leaders within firms. Only then will we see insurers harness the benefits of Big Data.
020 7311 5910
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
KPMG International Cooperative ("KPMG International") is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.