LV= Announces Annual Results for 2009
Press Release: 13 April 2010
Mutual insurance, investment and pensions group LV= announces its 2009 annual results
2009 financial highlights
- Underlying profit rose by £41.9m to £44.2m (2008: £2.3m).
- With-profits fund investment return of 15.4%, 2% above benchmark.
- Gross written premiums in general insurance up to £811.1m.
- General insurance business made a profit of £7.0m (2008: loss of £30.1m), going into profit one year ahead of plan.
- APE in the life & pensions business was up 7.5% to £92.2m (2008: £85.8m).
- Capital resources of £0.9bn (2008 £1.1bn).
- Group IFRS loss before tax was £91.4m (2008: loss of £258.3m) reflecting short-term investment fluctuations, protecting the value of members' with-profits policies, and reserve strengthening.
Delivering for LV= members
- Significant turnaround in underlying profit in just three years, from a loss in 2006 to an underlying profit of £44.2m in 2009.
- LV= remains soundly capitalised, with group capital surplus 1.6 times the level required on the FSA realistic basis (2008: 2.1 times).
- LV= policyholders with a £50 a month 25 year savings endowment with-profits policy maturing on 1 March 2010 were at least 39% better-off than equivalent policyholders with four major proprietary companies.
- LV='s financial strength enables significant holdings in long term growth assets (around 74% of the fund at the year end), which should benefit members' returns in the longer term.
- Cazalet Consulting's latest with-profits report gives LV= full marks ie 10/10, while AKG rates LV= as B+ or 'very good'.
- LV= customer satisfaction in 2009 increased to 96% overall.
- LV= customer and member numbers grew, up 12% to over 3.8m (2008: 3.4m).
Strategic progress in core businesses
- Successful integration of Highway Insurance (acquired in October 2008) with expected cost-saving and efficiency benefits of £10m a year.
- Positive market reaction to the acquisition helped boost Highway premium income by over 21% to £287m (2008: £236m).
- Continued growth in life & pensions, with market share increased across most product areas.
- Sales of individual protection increased by 13% to £17.7m APE (2008: £15.6m).
- Income from over 50s life insurance up 27% to £3.3m (2008: £2.6m), driven partly by new partnership with Asda.
- Orderly wind-down of banking subsidiary continues according to plan, with significant de-risking of banking exposure achieved. LV='s banking business posted a £5.5m profit thanks to lower than expected bad debts.
- Further investment into LV= Asset Management and development of third party and retail funds management franchises. New market leading team acquired to head UK equity business, and 9 out of 15 retail funds now have at least 'A' ratings from Standard & Poors.
- LV= received widespread industry award recognition for product quality across life & pensions, general insurance and asset management. These include a Moneywise 'Most Trusted' award for home insurance, several Which? recommendations and Defaqto 5 Star awards, plus a Best Lifetime Mortgage Lender award from What Mortgage?.
Mike Rogers, LV= Group Chief Executive, said: "Despite another difficult year of continued recession and market turbulence, the turnaround of the LV= business continues according to plan. Our core mission of helping our members and customers to look after what they love has enabled us to do more business with more customers.
"A strong growth in underlying profit reflects our efforts in re-shaping the business and improving our organisational fitness. Improved awareness of the LV= brand, thanks to our distinctive marketing campaigns, has helped to support a strong sales performance across our life & pensions and general insurance businesses.
"Our strong investment performance underpins solid returns for our with-profits policyholders, ahead of most of the market, and we also remain strongly capitalised. In 2010, trading has begun strongly, with sales in the first quarter significantly up on the same period last year."
LV= 25 year with-profits payout outperforms four major proprietary providers
Provider | 25 year conventional with-profits payout (£50pm, male, 30nb) | LV= members better-off by | |
|---|---|---|---|
LV= | £51,754 | ||
Standard Life | £28,139 | £23,615 | +84% |
Friends Provident | £29,966 | £21,788 | +73% |
Legal & General | £34,486 | £17,268 | +50% |
Aviva (CGNU fund) | £36,979 | £14,775 | +39% |
LV=
LV= and LV= Liverpool Victoria are trademarks of Liverpool Victoria Friendly Society Limited. LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies.
LV= employs around 4,000 people, serves over 3.8 million customers and members, and manages around £7.7bn on their behalf. We are also the UK's largest friendly society 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, AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.