Annual Report

Video transcript

What are the highlights for 2017 financial results?

So today we announced our group results and the highlights are many that I could pick from.

The headline numbers: £158 million of profit. That's a great result across the business. We've seen growth in both Life and GI. Life broke through the £2 billion sales mark for the first time and produced a very healthy operating profit of around £37 million.

And GI had a very very strong year! So by any stretch and by any measure those results are the ones we can be truly proud of.

How would you describe 2017?

2017 was undoubtedly a transformative year for LV=. You've just heard that we've released a great set of trading numbers. But more than that we announced a landmark deal with Allianz in our General Insurance business.

This helped to strengthen our capital position, something I was committed to last year and our Capital Coverage Ratio increased from 140% to around 180%. So under Lean and Strong we are now in a much better position.

On the Life side we've taken steps to reunite the business and help give us the platform for reinventing Life Insurance

You've always been passionate about customer service. Is this still a focus for you?

Customer service will always be a focus for LV= as it should for any company. You can't produce a great set of financial results without delivering great service for your customers and your members. And I've been delighted in 2017 with the performance that we've delivered.

So we've jumped 68 places up to number 32 in the Nunwood Customer Experience survey. That's a benchmark used by everybody in not just the financial services industry but across the UK.

We've also delivered great customer service in our General Insurance business where we've been voted Which? Insurer of the Year. And we've also been voted the most trusted, the most recommended Adviser by both YouGov and Moneywise.

So a great set of results for our customers and members.

So what's next for LV=?

2018 marks our 175th birthday which is a monumental achievement for any company. But it is really important to look forward an to challenge yourself as to what comes next.

On the Life side we've been thinking about how we transition ourselves into health, wealth and knowledge and really looking at reinventing the life insurance sector. On GI, we're looking at how we leverage the relationship with Allianz and really create a force to be reckoned with in the GI personal lines market.

So with our capital position secured with a really strong set of financial results behind us and a really strong employee and customer franchise I'm really excited about the year ahead!

Video transcript

Can you explain today's numbers in more detail?

2017 was a very good set of financial results. We saw operating profit of £158 million and a pre-tax profit of £122 million.

Of this, our General Insurance business generated £121 million of operating profit helped by improved rates and favourable claims experience and also a bit less reliance of prior year reserve releases. On the Life side we broke through the £2 billion threshold in terms of New Business sales and we generated operating profit of £37 million which was £24 million up on 2016.

What's the latest with your solvency position?

Our Group Solvency position is 180% at the end of 2017 which I'm very pleased with.

At the end of 2016 we had a solvency position of 140% and we said at the time that wasn't good enough and we needed to strengthen it. And through a combination of the Allianz transaction and various other capital initiatives that we've taken through the year we've improved to 180% which is a very healthy ratio for the society.

Where are you with the cost reduction programme?

In terms of cost reduction, the good news is we're making solid progress here.

In 2017 our costs were £8 million down of the prior year at £431 million and we've achieved that cost saving through a combination of good day to day cost management, a 400 headcount reduction but achieved with minimal redundancies and an ongoing review of discretionary spend.

There's always more we can do on costs and we'll continue to keep focused in this area.