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Catch up with the latest press releases from LV=

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LV= announces strong life sales performance

Press release: 03/04/2012

Mutual insurance, retirement and investment provider LV= announces its 2011 life and pensions business results, with increased sales and trading profit compared to 2010.


2011 financial highlights:

  • Trading profit of £33.7m, a 20% increase (2010: £28.0m)

  • Driven by sales of £142m on an APE[1] basis (2010: £124m), a 15% increase

  • Retirement business saw a 14% growth in sales with APE of £114.3m (2010: £100.3m)

  • Protection business is up 18% with APE of £28.0m (2010: £23.7m)

  • 125 new jobs created in 2011

  • A £50 a month 25 year savings endowment policy maturing on 1 March 2012 paid out £44,108 (2011: £47,096)

Richard Rowney, LV= Life and Pensions Managing Director, said: "2011 was another very successful year for LV='s life and pensions business, despite a challenging economic backdrop and the preparations we’ve needed to make for significant regulatory changes."

"We have continued to deliver on what advisers and customers tell us they want, which has enabled us to increase sales and gain market share across our retirement and protection business. Our continued strong performance was also driven by a combination of competitive pricing and a reputation for quality products and service."


Highlights of performance by product:

  • Annuities: 20%* increase with APE £53.0m (2010: £44.0m).

  • Pensions: 12% increase with APE £46.7m (2010: £41.6m).

  • Income Protection: 34% increase with APE £5.8m (2010: £4.3m)

  • Critical Illness: 52% increase with APE £6.1m (2010: £4.0m)

* Annuities includes enhanced, investment linked and 'fixed term annuity' protected retirement plan

Richard Rowney continued: "LV= is one of only a few providers leading the charge in markets such as flexible drawdown and fixed term annuities, an area we believe will see an increasing demand."

"Equally in the protection market, we have maintained our position as the market leader in advised income protection, and we have a strong solution for mortgage advisers and IFAs post the MPPI competition commission ruling on 6 April, in the form of our long-term mortgage and lifestyle protection product. We are also revitalising our critical illness product in the coming weeks to put it at the top of the market."

"Our strategy to focus on areas of expertise in selected risk-based products continues to differentiate us in an increasingly competitive market."

LV= Group 2011 business results:

  • Group underlying profit up 10% to £99.4m (2010: £90.7m)

  • Operating profit of £29.5m (2010: loss of £10.4m)

  • IFRS result after tax and before mutual bonus of £10.6m (2010: £21.3m)

  • Net-earned premiums up 28% to £2.1bn (2010: £1.65bn)

  • Group total assets up 13% to £10.3bn (2010: £9.1bn)


Financial highlights:

  • Premium income grew by 23% to £1.46 billion

  • Trading profits more than doubled to £72.1m

  • The combined operating ratio (COR) improved by 6.5 percentage points to 97.7% from 104.2%

  • Return on capital employed (ROCE) increased to 12.9%

  • 500 new jobs created in 2011

  • LV= is the UK’s fourth largest car insurer with c.10% market share

Mike Rogers, LV= Group Chief Executive, said: "LV= performed well in 2011 with underlying profits up. The final result shows the impact of turbulent investment markets and reserve strengthening, however despite this we were able to continue to deliver strong returns to our members. I am delighted to additionally confirm a mutual bonus of £18.6m for with-profit members representing an increase of 1% to the value of their policies."

"The life business has achieved good results delivering a 20% increase in underlying profit and a 15% increase in sales. Our with-profits fund continues to perform strongly delivering market leading payouts and a combined return of 40.9% over the last three years."

Commenting on LV='s expected performance in 2012, Mike Rogers said: "We believe 2012 will be a year of steady growth for LV=. We are now well established in our chosen markets and we plan to build on this over the coming years."



Notes to editors:

1 - APE = Annual Premium Equivalent This is a measure comprising new regular premium sales plus 10 per cent of single premiums.

Customer satisfaction is measured by The Leadership Factor, an independent benchmarking agency.

i Table one

Actual Maturity Values

Product

Term years

Industry

LV=

Lower Quartile

Median

Upper Quartile

Endowment

15

10,324

11,057

12,009

12,603

20

17,168

19,144

21,756

24,283

25

29,350

32,435

36,052

46,521

Pension - regular

15

44,496

48,410

50,556

60,095

20

72,337

80,662

89,406

108,561

Endowment: Male aged 30 next birthday at outset, paying £50 a month premium, maturing on 01/02/2012
Pension: £200 a month contributions, maturing on 01/01/2012
Source: Money Management March 2012


About LV=

LV= employs over 5000 people and serves around five million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trades unions.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.