Responsible business practice

We believe everyone deserves to live confident lives

CUSTOMER SATISFACTION

It’s our people that make LV= special and its down to their hard work, enthusiasm and passion to do the right thing that delivers great customer experiences

The customer experiences that we aim to deliver centre around being easy to do business with, making sure customers feel valued and always delivering with heart.

We want our customers to be happy with the service they receive, but we realise we don’t always get things right - that’s why it’s so important for us to fix any issues that arise. This is reflected in the two gold awards that we received in 2021 for the Best Complaint Handling Team and Most Improved Complaint Handling, both courtesy of The UK Complaints Handling Awards.

In 2021 of complaints referred to the Financial Ombudsman Service (FOS), FOS agreed with 91% of our decisions, which demonstrates our effort and commitment to provide the right outcome for our members and customers. It’s also vital that we address any dissatisfaction as quickly as possible; and so we’re pleased to confirm that over half the complaints we received last year were acknowledged within three working days.

As well as resolving complaints the team offer support if someone is shown to be vulnerable. The team signpost to external charities and organisations, provide details of our Member Care Line and tailor services as appropriate.

Complaints summary 2021

  Complaints received Referred to FOS Referred cases where outcome was not in LV='s favour
Savings and Retirement 1,446 11 1
Protection 2,077 76 4
Heritage

(including Teachers Assurance)

1,672 23 4
Tied products and Whole of Market

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

69 3 0
Legacy business

(ongoing PPI claims)

8 0 0
Overall 5,272 113
  Complaints received Referred to FOS Referred cases where outcome was not in LV='s favour
Savings and Retirement 1,446 11 1
Protection 2,077 76 4
Heritage

(including Teachers Assurance)

1,672 23 4
Tied products and Whole of Market

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

69 3 0
Legacy business

(ongoing PPI claims)

8 0 0
Overall 5,272 113

Financial crime

We have robust systems and controls across LV= to effectively prevent financial crime and losses. We continue to strive to protect our members, customers and the wider business from becoming victims of financial crime. In 2021 we prevented financial losses amounting to £5m. Following the departure of our Director of Financial Crime, all financial crime responsibilities including those of the Money Laundering Regulations Officer moved to our Chief Compliance Officer in October 2021.

Specific to our Savings and Retirement business, the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 came into force on 30 November 2021. These regulations set out certain conditions that need to be met before a pension transfer can proceed, with the aim to protect savers from pension scams. Our financial crime team worked with the business to ensure our processes are compliant with these new regulations.

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 Financial Conduct Authority (FCA) and Prudential Regulation Authority (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.

Human rights and modern slavery

As a responsible business we understand the importance of human rights and we adhere to fair employment practices. Our Modern Slavery Statement for 2021 will provide more information about the actions we take to identify, assess and mitigate against modern slavery and human trafficking.
Read the full Modern Slavery Statement

Supplier management

Maintaining a relationship with the suppliers that we work with is the responsibility of each area of the business and all suppliers are given an LV= business owner. The business owner is usually the person who works with that supplier the most and their responsibilities include supplier management, engagement and performance monitoring.

The procurement and sourcing department continues to focus on overseeing and challenging spend with third party suppliers. They also provide ongoing support and guidance to the wider LV= business around mitigating risks and measuring a suppliers performance against their respective contractual obligations. Our Cost Management Unit, which was set up in 2020, continues to be run by the sourcing team. Their role is to challenge spend requests with the objective of finding the most cost-effective solution.

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. 

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 and we continue to diligently enhance our approach to responsible investment. You can view our approach to responsible investing on our website.

In April 2021, a Sustainability Working Group was established with senior leaders from across the business. The focus of the working group is to align our business strategy to sustainable objectives.

There has already been strong progress to strengthen our corporate responsibility aspirations and to take opportunities, where possible, to reduce the carbon footprint of our investments.

In 2021 we invested over £200m in Sustainable Equity Funds. These are designed to align with the UN Sustainable Development Goals. For example, DSM (a company held within the funds) has developed a unique feed additive that reduces methane emissions from cattle by over 30%. During the year it gained its first market authorisation in South America and has received positive feedback in Europe, the step before formal approval.

We continue to develop and enhance our approach to sustainability and will explore further allocations to ESG funds in 2022.

During 2021 a number of our investment decisions were specifically driven by ESG considerations. In some cases, particularly in our equity holdings, we’ve divested from firms who we believe aren’t taking action fast enough to address ESG concerns, for example, a US defence firm who could not demonstrate safe disposal of environmental waste. ESG considerations are firmly embedded in the portfolio construction of our investment funds. This includes our assets backing annuity business where we’re actively restricting new investments into bonds issued by tobacco or energy firms with poor ESG ratings.

We also invest in commercial mortgage loans where ESG outcomes are an important factor in screening new loans for approval. Our approach isn’t just about excluding loans that fail to meet our ESG criteria, it also actively seeks loans with potentially strong ESG outcomes. For example in 2021 we invested in a new loan that gave preferential terms to a firm if it met a set of ambitious ESG objectives.
Focusing specifically on environmental risks and financial risks arising from climate change, the Investment Committee, With-Profits Committee and relevant management committees regularly monitor the carbon footprint of our investments by reviewing metrics covering carbon intensity and carbon emissions. In all of our funds, the carbon intensity and carbon emissions of our investments are lower than the market indices and in some cases, considerably lower, for example, the carbon emissions of our US equity fund are over a third lower than the carbon emissions of the S&P500.

There are a range of other metrics we regularly monitor such as carbon intensity, carbon emissions, controversial name exposure and ESG ratings. We expect to continue to develop a suite of wider ESG metrics to evaluate performance against our responsible investing principles and practices.

Over the next few years we expect to be able to significantly add further information on our management of the financial and non-financial risks arising from climate change to align with the recommendations of the Task-force on Climate-related Financial Disclosures, TCFD.

Columbia Threadneedle Investments

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.

We regularly monitor ESG ratings provided to us by CTI, along with other external ESG ratings. In our portfolios, our investments typically have stronger ESG ratings than the market indices we use as our benchmarks, such as the S&P500, the FTSE All Share and the MSCI All Country All World Index - and we expect this to continue.

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. We believe engagement with investee companies is an effective way to drive positive ESG change and contribute to the long-term success of the global economy. So we aim to use our influence and voting rights to drive positive change and generate strong performance over the long term. 

Documents

Responsible business practice information can be found in our Annual Report