LV= ANNOUNCES ANNUAL RESULTS FOR 2007
Press release 8th April 2008
LV=, the UK's largest friendly society, formerly known as Liverpool Victoria, has announced its annual results for 2007.
Group Financial Performance in 2007
- Group operating profit before tax of £49.6m, up from a loss of £20.1m in 2006.
- Total Group profit before tax of £56.4m, down from £113.7m in 2006, in line with lower market returns generally in 2007.
- Strong financial position with £1.3bn of capital resources and £8bn in assets under management.
Life & Pensions
- Operating profit on the life and pensions business increased by 33% from £75.5m to £100.1m.
- Life and pensions APE was up from £25.8m to £35.1m, including six months of new retirement solutions business.
- Acquisition of specialist retirement solutions business (formerly GE Life) from Swiss Re, relaunched under the LV= brand in January 2008.
General Insurance
- Sales (Gross Written Premiums) of new general insurance products were up 39% to £89.2m, with car insurance sales up 25%.
- Launch of general insurance broker brand ABC into the small business and motor markets.
- Successful acquisition of Britannia Rescue.
- Planned investment and transformation costs to support growth plans, and exceptional adverse weather conditions (flood claims of £33m), led to a general insurance loss before tax of £46.3m (2006 £21.5m loss).
Asset Management
- Despite a volatile market environment, 2007 with-profits performance was strong:
- LV= Asset Management achieved with-profit investment returns 1.9% ahead of their performance benchmark.
- Overall investment return on the with-profits fund of 5.7%.
- £142m added to with-profits asset shares.
- LV= continues to have no direct losses from, or exposure to, the US sub-prime mortgage market.
Other Businesses
- Strategic partnership with Lighthouse Group plc to continue offering whole of market advice to members and affinity partners.
- In line with the decision to exit credit card manufacturing in 2006, LV= announced in November 2007 its withdrawal from the personal lending market, which was completed by 31st December 2007.
Other Developments
- Launch of new brand identity LV= in March 2007; two successful TV advertising campaigns during the year, for car and life insurance.
- Acquisition of new URL www.LV.com to strengthen our online offering, contributing to a 154% uplift in online general insurance sales.
- Unequivocal mortgage endowment guarantee reiterated, policies paid to full term guaranteed to meet any mortgage amount covered by the policy.
- Various awards achieved including 10/10 Cazalet Consulting with-profits rating for fund financial strength, investment freedom and flexibility, and bonus paying ability. We were also awarded an improved rating of B+ from AKG for overall financial strength.
Mike Rogers, Group Chief Executive of LV= said: "2007 was the first year of our five year business transformation plan. Our underlying performance was encouraging and lays a solid platform for future growth. Our life and pensions business performed strongly and, with the new flexible retirement business on-board, is in a good position to take advantage of expected growth in the retirement market.
"In our general insurance business sales were up significantly, although performance overall was impacted by significant investment in restructuring and new technology, and adverse weather events including £33m in flood claims.
"Strategic investment plans for our asset management business LV= Asset Management were confirmed, including the development of several new funds to support our new retirement business, and our planned expansion in retail investments. A number of senior hires were made to help deliver this plan.
"2007 was also a year for consolidation in certain areas and there were exceptional costs associated with our exit from non-profitable activities in whole of market advice provision, and personal loan sales. We also entered the last stages of our ongoing exit from credit cards.
"In the first quarter of 2008, despite turbulent market conditions, our financial strength and trading momentum continued. General insurance new business sales from all channels were up 37% on Q1 2007 and life and pensions sales were up 113%. We have also successfully concluded in the first quarter of 2008 both the transfer of our IT arrangements to new suppliers, and the recapture of our life processing operations.
"We have come through a huge amount of change and strategic development. We are now well placed to compete successfully going forward and achieve our ambitious but realistic plans, and grow the value of the business for our members."
LV=
LV= and LV= Liverpool Victoria are trademarks of Liverpool Victoria Friendly Society Limited and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. The new LV= brand identity was launched in March 2007.
LV= employs more than 2,000 people, serves more than 2.5 million customers and members, and manages £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.
