Responsible business practice

We believe everyone deserves to live confident lives

Being responsible

Customer service will always be important to us

And it’s our aim to make sure that our customers and members have the best possible experiences with our people.

  • Our people strive to make sure that we’re easy to do business with and we’d like all of our customer and members’ interactions with us to be positive. 
  • We know that sometimes this doesn’t always happen; so on these occasions we do our utmost to make sure that we put things right. 
  • The Financial Ombudsman Service (FOS) agreed with 93.25% of our decisions in cases referred to them in 2020, which shows our commitment to customer service.

It’s also important to us that we respond to any dissatisfaction as quickly as possible. In 2020 a dedicated team was formed to look after our complaints process, but they also exist to support our customers and members with any vulnerable situations they may be in.

Our team signpost external charities and organisations who can offer support, provide details about our Member Care Line and look to tailor our services to meet our customers’ and members’ needs where possible.

Complaints summary 2020

  Complaints received Referred to FOS Referred cases where outcome was not in LV='s favour
Savings and Retirement 486 17 1
Protection 1,816 84 7
Heritage

(including Teachers Assurance)

1,020 31 2
Tied products and whole of market

(sold by our advisers as part of our advice team)

48 7 1
Legacy business

(ongoing PPI claims)

832 24 0
  Complaints received Referred to FOS Referred cases where outcome was not in LV='s favour
Savings and Retirement 486 17 1
Protection 1,816 84 7
Heritage

(including Teachers Assurance)

1,020 31 2
Tied products and whole of market

(sold by our advisers as part of our advice team)

48 7 1
Legacy business

(ongoing PPI claims)

832 24 0

Financial crime

Fighting financial crime remains central to protecting our customers, our communities and our business – the impact of which far exceeds just an economic one. Cybercrime, terrorist financing and human and drugs trafficking are just some of the types of criminal activity that lay behind fraudulent acts against our business and our customers.

During the first quarter of 2020 we reshaped our financial crime strategy. In particular, this included changes required as a result of the new Money Laundering Regulations and enhancements to our internal screening solution. Both of these changes will help us to meet our legislative and regulatory obligations by screening for individuals on the Financial Sanctions and Politically Exposed Persons lists. 

We continue to operate robust systems and controls across LV= which are in place to help prevent financial crime and losses. Every day we strive to protect all of our customers, members and the wider business from becoming victims of financial crime. 

In 2020 we were able to prevent financial losses of £10million.

The Financial Conduct Authority issued guidance about financial crime systems and controls during the Covid-19 crisis. The financial crime team provided support to the business so we remained compliant at all times, while ensuring we could still provide the best service to our customers and members.

Bribery and fraud

Detecting and preventing fraud and bribery continues to be a priority for us. Our ‘Speak Up’ service is a confidential hotline and mailbox where our people can report any suspicions of wrong-doing in confidence. Every case is taken seriously. The service is operated by our internal audit team, providing a genuinely independent way to report concerns, and is overseen by our Speak Up Champion.

The Speak Up service is operated in accordance with the requirements set out by the FCA and PRA. We regularly promote the service internally to ensure teams are reminded of how to report concerns.

Data vishing

Data Vishing is when an individual pretends to be someone they aren’t and they make phone calls to try and gain personal data. This allows them to do a number of things, for example, use the data to set up fraudulent accounts, to obtain a financial benefit. Our people look out for Vishing on a day-to-day basis. We have equipped them with an App that allows them to report their suspicions. The data is analysed regularly by our financial crime team. This allows us to identify emerging threats and notify appropriate regulators or agencies. We also support customers who may have been targeted. During 2021, we will review our approach to Vishing to make sure we’re doing all we can to protect our customers, members and the business.

Human rights and modern slavery

We adhere to fair employment practices and acknowledge our responsibilities to support human rights. Our Modern Slavery Statement, which is published each year, outlines our approach. The Statement covers the actions we take to identify, assess and mitigate against modern slavery and human trafficking. It applies to not only our own business, but to anyone we do business with, including our suppliers.
Read the full Modern Slavery Statement

Suppliers and procurement

Supplier management  

Each area of the business is responsible for maintaining a relationship with the suppliers they work with and each supplier is allocated an LV= business owner. This person is usually someone who works with the supplier the most. Their responsibilities include supplier management, performance and engagement. In 2020 the Procurement team rebranded to Sourcing and implemented a new operating model to improve the support they offer to not only business owners, but the whole of LV=. This included the setup of a Cost Management Unit which you can read more about below. This new model focuses on building stakeholder relationships to better understand their needs, provide ongoing support and offer guidance. 

It’s vital we have robust systems in place to respond to regulatory change and to demonstrate that we are proactively striving to minimise risk across our supply chain. We continue to be partnered with the UK based company Hellios Information Limited. Their expertise centres around the collection and maintenance of supplier data. They do this via their Financial Service Qualification Systems (FSQS). FSQS is a due diligence system which collates information about a supplier’s systems, controls and risk management maturity.

Cost Management Unit 

The Cost Management Unit (CMU) was created so that the Sourcing team can support ongoing business and commercial objectives. The CMU is held on a weekly basis and attendees include Sourcing, Cost Management and Managing Director delegates from our three lines of business. The role of the CMU is to review all spend from across the business. This review ensures costs are suitably challenged and that the best interests of our customers and members remains at the forefront of everything we do. It also enables a collaborative approach between Cost Management, Supplier Risk and Compliance to manage supplier and business risks. 

Green Heart Procurement 

The Buy Social Corporate Challenge, led by Social Enterprise UK, came to an end at the end of 2020. The challenge lasted four years and saw us become one of 24 companies to buy from social enterprises. 

As a result of the challenge, we’ve been introduced to a number of social enterprises across a range of sectors. We’ll continue to draw on these for our future business needs. Learning and development, mental health and wellbeing, and diversity and inclusion present opportunities to develop new partnerships with social enterprises. These areas are particularly prominent in how we continue to support our members, customers and employees through the Covid-19 pandemic. 

Even though the Buy Social Corporate Challenge has finished, we’re committed to its ethos. We’ll continue to consider a supplier’s ethics and the impact our spend will have on their own social mission. This is also important for subcontractors of suppliers and their supply chains.

 

Responsible investment

For full information about our approach to responsible investing, please take a look at our Responsible Investing Approach.

Responsible investment encompasses all Environmental, Social and Governance (ESG) considerations. Throughout 2020 we further enhanced our approach to responsible investment and created a set of principles and practices. We’ll continue to develop and enhance this approach in 2021. 

In partnership with our asset manager Columbia Threadneedle Investments (CTI), responsible investing is integrated into all of our investment decisions. We believe that well-governed companies are likely to outperform in the long run and the key to generating sustainable returns is to understand ESG considerations, risks and opportunities. 

CTI were early innovators in this space, having built their responsible investment team over 20 years ago. Eight years later they became a founding signatory to the United Nations Principles for Responsible Investing (UNPRI). They were awarded the top rating by the UNPRI in 2018 and continue to be market leaders in the development, consideration and integration of Responsible Investing. Their responsible investment team, which operates as a standalone investment desk, offers analysis and research from an independent perspective. The team have developed and integrated their own proprietary ESG rating system which allows for careful consideration of ESG risks when building our portfolio of investments. This means investment decisions are based on ESG factors as well as financial performance.

We believe that active ownership is core to responsible investing. On our behalf, CTI use our voting rights to firmly engage with companies around material ESG risks and opportunities. There are some exclusions which are operated across various portfolios. These include a ban on controversial weapon investments and a restriction on tobacco holdings within funds backing our RNPFN business. Engagement with investee companies is an effective way to drive positive ESG change and contribute to the long-term success of the global economy. We aim to use our influence and voting rights to drive positive change and generate strong performance over the long term. 

Building on strong momentum from 2019, we continue to develop our management and focus of climate risk related activity. At the end of 2020, only 0.05% of equity assets in our main with-profits fund and our three Smoothed Managed Funds are invested in companies with at least 25% revenue generated from coal use, production or extraction. 

Important documents

Responsible business practice information can be found in our Annual Report