DORSET insurer LV= has gone from loss to profit as bosses gear up to sell the business to an American private equity company.

The County Gates-based business went from a £16million operating loss to a £40m profit in 2020, it revealed.

Chief executive Mark Hartigan said: “Despite the unprecedented challenges presented by the pandemic, LV= has delivered a good financial performance in 2020.

“Through the year we have created significant momentum in our trading businesses and I am particularly pleased that we increased market share in both savings & retirement and protection. By taking quick and positive actions in response to Covid-19, as well as delivery of planned change initiatives, we continue to improve service for customers and have strengthened the propositions we offer the market.”

He added: “The vast majority of our people have been working from home since the first lockdown in March 2020. I was impressed with how quickly our teams were able to adapt to home based working. It is thanks to the hard work and dedication of our people that we maintained good levels of service and didn’t need to close our phone lines at any stage. Over the course of the year we managed to increase our Net Promoter Score among financial advisers.”

Trading profit in the savings and retirement business fell 68 per cent to £8m, while trading profit in the protection business dropped 87 per cent to £2m. But operating profit was boosted by a rise in investment income.

LV= completed the sale of its general insurance business to Allianz a the end of 2019. It announced in December that it would be pursuing a sale of the rest of the business to Bain Capital Credit, an American firm whose founders include the US senator and former presidential candidate Mitt Romney.

Mr Hartigan said: “Success in 2021 will be determined by three simple objectives; to deliver the transaction with Bain Capital Credit, to hit our trading targets and to continue to reduce the complexity of our business and improve efficiency. With the backing of Bain Capital Credit, the board is excited by the opportunities for LV= to develop as a major force in the UK life insurance market for the benefit of our customers, people and partners.”

Martin Shaw, chief executive of the Association of Financial Mutuals, questioned the deal in an article for FT Adviser.

He said the decades-long shift of mutual insurance companies to PLCs often come with promises to customers that if they give up their control they will be rewarded financially. However, some such promises have proven to be “hollow in retrospect”, he added.

LV=’s values put customers at the heart of how the business is run, he said. There was no guarantee this would change after the takeover by Bain, Mr Shaw said.