DORSET-based LV= has seen pre-tax profits rise sharply despite a large fall in sales of life insurance, savings and retirement products.
The results come as LV= prepares to quit the general insurance market and end its status as a friendly society.
In figures for the first six months of 2019, the County Gates-headquartered business reported that pre-tax profits from continuing operations stood at £35million – up from £12m in the same period last year.
But life insurance sales were down from £970m to £710m, while group costs and one-off factors led to a £27m operating loss, compared with a £27m profit in the first six months of 2018.
LV= chief executive Richard Rowney, said: “2019 is an important year in the evolution of LV= as we establish the foundations from which to build a better mutual for the future.
“In the first six months we successfully negotiated an improved sale price for our remaining shareholding in our general insurance business to Allianz, representing a good deal for our members. We also achieved member support for our important plans to convert to a company limited by guarantee.”
He said profits in the life insurance business had fallen from £27m to £18m due to a “combination of factors” including a continued decline in pensions and uncertainty in the investment markets.
Mr Rowney added: “One of the foundations of our success over the years has been the strength of the LV= brand and this remains in good health. Our ambition is to be best loved by advisers and our net promoter scores among IFAs (independent financial advisers) in the first half of the year placed us in the top quartile for both protection and retirement. We have also recently been named the Most Trusted Life Insurance Provider at the Moneywise Customer Service Awards, an accolade we have now won for the seventh year in a row.”
LV= will have exited the general insurance business by selling its stake in it to Allianz by the end of this year.
Sales of saving and retirement products fell from £818m to £560m in the period to the end of June. Mr Rowney said the figures had been “adversely impacted by the continued decline in the pensions market since its peak in 2017 and a slowdown in sales of our flexible guaranteed products due to market uncertainty in the lead up to Brexit”.
In the first six months of the year, LV= appointed Clive Bolton, formerly managing director of Aviva Life’s retirement business, to lead its savings and retirement business, and Debbie Kennedy, ex-group head of protection strategy at Royal London, to lead its protection business.
Mr Rowney added: “By the end of 2019 we will have completed our transition to a pure life and pensions provider with a clear focus on the low risk, advice led, mass affluent market. We look to the future with confidence as we build momentum across savings and retirement and protection while continuing to provide a good service to our heritage customers.”
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