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Insurers are under substantial pressure to demonstrate their financial and operational resilience to regulators across the globe.

Government, pressure groups and the media are continuing to voice their concern over the position that insurers have taken on Business Interruption (BI) insurance cover, along with the consequent impact on potential payouts to customers. There are significant parallels to the recent issues in the banking sector on PPI and interest rate hedging. As a result of this, KPMG in the UK has been talking to insurers and brokers in the market to advise on key learnings that can be taken to limit the impact on the industry, as well as practical next steps stakeholders can take after the FCA Court Case outcome and appeal.

What next?

Differing conclusions were made in relation to each wording examined in the test case. This creates considerable uncertainty for insurers as they now have to carry out an in-depth review of their policy wordings against the judgment.

We can also expect Action Groups and Claims Management Companies to become increasingly vocal. Against this backdrop, claims will need to be considered individually on their merits and fraudulent claims dealt with. The key will be to get money paid out rapidly to those who need it the most.

How can we help you?

To help insurers get the right outcomes for stakeholders and deliver a great customer experience, KPMG can provide a number of solutions. Through our KPMG Managed Services capacity we can take on and run BI operations for you, provide surge capacity support or bring technology to improve efficiencies in your process.

There are 4 key areas to our BI solution, leveraging technology to drive efficiencies in your response:

  1. Complaints Handling: leveraging our global delivery centres we can take on the end to end complaints handling process on your behalf, using Alliance partner complaints management software to track cases, identify vulnerable customers and resolve complex complaints to restore customer confidence whilst keeping compliant.
  2. Claims management: by running your BI claims management process we are able to relieve pressure in your BAU teams, catering to multiple customer journeys and complexities, at scale and in line with SLAs.
  3. Policy wording: we can support in legal and actuarial interpretation of the outcome of the Court Case and help understand of your affected policyholder population. We can help you automate the process through our AI platform which ingests and analyses policies containing Business Interruption clauses.
  4. Tools and technology: we’re able to rapidly deliver key tools to support your response, including our Business Interruptions Insurance Calculator which has been adapted from our Fairer Payments Calculator to cope with the complexities of BI claims and complaints. The Fairer Payments calculator was used by 90%+ of the banking industry for PPI claims and complaints. Our team would be happy to organise a demonstration of the Calculator to you and your business.

For support in shaping your firm’s response to BI, please get in touch via