Management consultant KPMG has been appointed by the Association of British Insurers (ABI) and the British Banking Association (BBA) to conduct a joint study on their possible merger.

An ABI spokesman said: "KPMG came across as the most qualified."

The BBA said, out of the competitive tender launched, KPMG was the "right match for the job". It is understood KPMG won the contract from a beauty parade of three that included PricewaterhouseCoopers and Ernst & Young.

This is good news for KPMG after a year embroiled in controversy over the collapse of Independent Insurance. Two weeks ago the Creditors of Independent Insurance Group (CIIG) voted to take a group litigation order (GLO) against KPMG, the Financial Services Authority (FSA) and actuaries Watson Wyatt.

KPMG will report to the governing bodies of the two organisations in the summer.