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Catch up with the latest press releases from LV=

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LV= announces strong new business growth

Press release: 09/09/2008


Mutual insurance and investment group LV=, the UK's largest friendly society, has announced its new business results for the six months ending 30th June 2008.

Life & Pensions

Life and Pensions total Annual Premium Equivalent (APE) was up 186% to £39.7m (H1 2007: £13.9m). This includes:

  • Retirement business APE up to £28.8m (H1 2007: £2.6m).

  • Savings & Protection APE £10.9m (H1 2007: £11.3m).

(H1 2008 figures reflect acquisition of retirement solutions business from 1st January 2008.)

General Insurance

Overall insurance sales (Gross Written Premiums) up 21% to £206.5m (H1 2007: £170.1m), this includes:

  • New business GWP of general insurance products up by 68% to £66.6m (H1 2007: £39.6m).

  • Direct business including aggregator increased to £47.4m (H1 2007: £39.4).

  • Broker business up to £19.2m (H1 2007: £0.2m).

  • Britannia Rescue GWP up to £12.0m (H1 2007: £2.3m, covers part of half year only following acquisition of Britannia Road Rescue in May 2007).

Asset Management (LVAM)

  • LVAM has launched 12 new funds so far this year, all of which are designed to focus on specific customer needs, matching a range of consumer risk profiles.

  • New strategic partnership secured with Lighthouse, giving access to retail distribution opportunities through a recognised IFA platform.

  • Despite a volatile market environment, overall investment performance has remained robust both for the traditional with-profits portfolio, which is ahead of benchmark, and the more recently launched OEIC investment funds, many of which are performing above their peer group average

Other Developments

  • Announcement of all-cash offer to acquire the Highway Insurance business.

  • Launch of travel insurance and pet insurance products.

  • Launch of Mortgage & Lifestyle Protection product.

  • Defaqto 5 star ratings for motor and home insurance products, as well as Mortgage & Lifestyle Protection and SIPP products.

  • Launch of LVAM funds on Lighthouse Capital distribution platform

Mike Rogers, Group Chief Executive of LV= comments: "In a tough operating environment our new strategic focus and recent investments delivered strong performance across the LV= Group for the benefit of our members.

"Our Life and Pensions division is focused on specialist protection and retirement solutions. It delivered growth in Annual Premium Equivalent (APE) of 186% as the benefits of the acquisition of the former GE Life business flowed through.

"Despite a shrinking market we held our protection APE largely flat, reflecting our specialist product positioning, exemplified by the launch of our Defaqto 5 star rated Mortgage & Lifestyle Protection product.

"Retirement solutions performed strongly in enhanced annuities and pensions held up well despite the unfavourable market conditions. During the first half of 2008 we also launched our Flexible Lifetime Mortgage which we expect to drive growth in the second half of the year.

"In General Insurance new business sales growth of 68% reflects the success of our multi-channel approach with, for example, the broker channel achieving sales in excess of £20m so far this year. Internet sales have also performed exceptionally well and LV= has been named the fastest growing on-line insurer.

"Britannia Rescue is performing in line with our acquisition business plan.

"Strong sales and good retention saw the general insurance business make a welcome return to overall Gross Written Premium (GWP) growth, of 21%, after several years of decline.

"In addition to these performance improvements, our recommended offer for Highway Insurance will, following completion, enhance our general insurance broker business substantially, giving us a wider range of products to offer and greater critical mass in the market.

"Our Asset Management division LVAM benefited from investment in new capabilities and continued to outperform its with-profits benchmark. Cash-flows improved strongly on the back of retirement solutions business growth and our launch into the retail funds market.

"The first half of the year also saw some important operational milestones successfully concluded, with the recapture of our life processing and of significant parts of our IT and HR capabilities.

"Looking ahead to the second half of 2008 we see a firming general insurance market. We also anticipate continued growth in demand for retirement solutions products and services over the next few months, plus opportunities to leverage our asset management franchise still further."



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

GWP = Gross Written Premiums
These represent the revenue (premiums) expected to be received over the life of the insurance contract.

OEIC = Open Ended Investment Company
OEICs are hybrid investment funds that have some of the features of an investment trust and some of a unit trust. Like investment trusts, OEICs are companies that issue shares on the London Stock Exchange, and which use the money raised from shareholders to invest in other companies. Unlike investment trusts, they are open-ended which means that when demand for the shares rises the manager just issues more shares. With an investment trust, if demand exceeds supply, the response may be a rise in the share price. The price of OEIC shares is determined rather differently. More like a unit trust, in fact, with the key factor being the value of the underlying assets of the fund. But in contrast to unit trusts, there is no bid/offer spread with OEICs, so the price of the shares should be the same whether you are buying or selling.


Appendix

Analysis of Life APE and Insurance GWP sales figures

H1 2008

H1 2007

Full Year 2007

LIFE

Sales by product APE £m

Pension

20.0

0.4

10.5

Annuity

7.6

2.2

3.5

Equity Release

1.2

-

-

Retirement Total

28.8

2.6

14.0

Protection

7.8

8.0

15.0

Savings & Investment

3.1

3.3

6.1

LIFE Total

39.7

13.9

35.1

General Insurance

Sales by channel GWP £m

Broker

19.2

0.2

3.5

Direct including aggregator

47.4

39.4

74.2

New business

66.6

39.6

77.7

Renewals

127.9

128.2

257.5

Britannia Rescue

12.0

2.3

11.4

GI Total

206.5

170.1

346.6

Sales by product GWP £m

Motor

133.0

109.7

217.0

Household

57.6

57.7

115.8

SME, Britannia & other

16.0

2.7

13.8

Total

206.6

170.1

346.6


LV=
LV= and LV= Liverpool Victoria are trademarks of Liverpool Victoria Friendly Society Limited (LVFS) and LV= and LV= Liverpool Victoria are trading styles of the LVFS group of companies. The new LV= brand identity was launched in March 2007.

LV= employs more than 2,500 people, serves more than 2.5 million members and customers, and manages around £8 billion on their behalf. We are also the UK's largest friendly society (Association of Friendly Societies Yearbook 2006/2007, total net assets) and a leading mutual financial services provider.

LVFS is authorised and regulated by the Financial Services Authority and entered on the Financial Services Authority Register No. 110035. LVFS is a member of the ABI, AMI, AFS and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.

www.LV.com