From a loss of £12 million in 2016 to an operating profit of £158 million last year – that pretty much sums up how LV= has turned itself around.
“2017 has been a transformative year for LV=, and I am very proud of what we have achieved,” said LV= group chief executive Richard Rowney. “We secured a landmark strategic partnership with Allianz, delivered the first stages of our £100 million investment to transform our general insurance product and distribution capability and brought together our protection, retirement, and heritage business areas under a single leadership as we begin to evolve life into a broader health, wealth, and knowledge business.”
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Rowney partly attributed the “greatly improved” financial performance to the non-recurrence of the Ogden rate change and to positive contributions from both the general insurance and life businesses.
Here are the numbers for the mutual insurer:
- Profit before tax for the group – £122 million, up from a £49 million pre-tax loss in 2016
- General insurance gross written premiums – £1.60 billion, up from £1.58 billion
- General insurance operating profit – £121 million, up from £113 million pre-Ogden and a loss of £26 million post-Ogden
- Life new business sales – £2.02 billion, up from £1.85 billion
- Life operating profit – £37 million, up from £13 million
“Throughout 2017 we continued to take a number of actions to improve our capital position and also the performance of our business including the strategic partnership with Allianz and the implementation of a cost reduction programme to significantly reduce our cost base,” said Rowney. “Our capital coverage ratio has increased to 180% from 140% at the end of 2016, measured on a standard formula basis.
“This time last year I said that we were working to get the group back within its capital risk appetite and we have done this.”
As for the Civil Liability Bill recently introduced to Parliament, LV= said it welcomes the publication and hopes for a quick passage, noting how the insurer has consistently argued for a system that ensures fair compensation while also reducing motor insurance costs.
“We stand by our commitment to pass on 100% of any savings if the legislation is passed but, until such time, we will continue to appropriately reserve based on the current rate,” it stated.