Responsible business practice

Our purpose is to help people live financially confident lives

CUSTOMER SATISFACTION

Our LV= colleagues, across every site, are committed to delivering great outcomes for all of our members and customers

We want everyone to be happy with the interactions that they have with us and the service they receive. However we realise we don’t always get things right. That’s why it’s important that we fix any issues that arise and learn from them.  

We were recognised for our handling of complaints with an award win for the Best Approach to Complaints courtesy of the Collaboration Network Awards. The award recognises that our complaints processes and approach are highly regarded by peers within our industry and others.  

In 2022 the Financial Ombudsman Service (FOS) agreed with 94% of the decisions we made on complaints referred to them. This shows that we continue to be committed to provide the right outcomes for our members and customers. Any dissatisfaction that we receive is addressed as quickly as possible and over half the complaints we received during 2022 were resolved within three working days. 

The team don’t just deal with complaints. They also offer additional support to vulnerable members and customers. On an individual basis, and where appropriate, they’ll tailor our services and signpost to our member benefits, external charities and organisations that may be able to help. 

Complaints summary 2022

  Complaints received Referred to FOS Referred cases where outcome was not in LV='s favour
Savings and Retirement 1,434 15 2
Protection 2,607 64 5
Heritage

(including Teachers Assurance)

2,965 36 1
Tied products and Whole of Market

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

105 13 0
Legacy business

(ongoing PPI claims)

4 0 0
Overall 7,115 128 8
  Complaints received Referred to FOS Referred cases where outcome was not in LV='s favour
Savings and Retirement 1,434 15 2
Protection 2,607 64 5
Heritage

(including Teachers Assurance)

2,965 36 1
Tied products and Whole of Market

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

105 13 0
Legacy business

(ongoing PPI claims)

4 0 0
Overall 7,115 128 8

Financial crime

In 2022 we successfully prevented financial losses amounting to £8.7m. This is due to our robust systems and controls that help us to effectively prevent financial crime and losses across LV=.

We continue to protect our members, customers and the wider business from becoming victims of crime and we do this by:

  • carrying out verification checks to ensure we’re dealing with the correct individual and we know where funds are coming from or going
  • carrying out enhanced due diligence on higher risk customers
  • investigating suspicious insurance claims
  • reviewing pension transfers to protect our members from pension scams

Bribery and fraud

We have a financial crime policy, which sets out the framework for managing crime arising from bribery and corruption, fraud, money laundering, terrorist financing and market abuse. We have a dedicated financial crime team, which operates within our risk management team, to monitor adherence to this policy.

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 risk 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 our colleagues 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. We have fair and transparent employment and supply chain practices in place. Our Modern Slavery Statement for 2022 provides more information about the actions we have taken to identify, assess and mitigate against the risk of modern slavery and human trafficking across our business and supply chains.  
Read the full Modern Slavery Statement

Third party management

During 2022, a new third party management (TPM) team was formed to help the business buy goods and services in a way that maximises value for the business - as well as for our customers and members - and is in line with LV’s overall strategic direction.

Initially introduced in 2021, and under its supervision, the Prudential Regulatory Authority (PRA) brought in two pieces of legislation and new regulatory requirements for our sector – Impact tolerances for important business services and Outsourcing and Third Party Risk Management. Both became fully effective in March 2022. More information on these can be found below.

The TPM team played a critical role to ensure we complied with these requirements within the regulatory deadline, and will continue to oversee all supplier contracts. They’ve introduced new processes to underpin the changes that were required, and collaborate with a number of vendors including Hellios, Docusign, Moody’s and Experian using their software tools to support these activities. They also developed an operating model, detailing the required processes, that undergoes a regular programme of revision and enhancement to ensure the business remains focused on the key aspects of our third party relationships.  

Working with LV= business owners, who manage the day-to-day activities with our suppliers, the TPM team provide ongoing support and guidance around mitigating risks and measuring a supplier’s performance against their respective contractual obligations. The level of support required by the team is defined by a clear segmentation process, which identifies how critical to the business the services are (as set out in our impact tolerances for important business services). 

Impact tolerances for important business services

The PRA expects the operational resilience of our important business services to include set impact tolerances. The policy objective is to improve the resilience of both us and the wider financial sector to operational disruptions.

Outsourcing and Third Party Risk Management

The PRA expects us to comply with regulatory requirements relating to outsourcing and third party risk management.

The vendors we work with

Hellios Information Limited

Experts 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.

Docusign eSignature

Docusign eSignature allows us to securely send and sign documents virtually anywhere.

Docusign CLM

Docusign Contract Lifecycle Management system provides us with a central repository for all of our contracts, with various reporting capabilities that allow us to generate a pipeline of upcoming contractual actions such as renewals and terminations. 

Moody’s Analytics

Moody Analytics provide access to the Orbis data set which holds information on nearly 450 million registered companies worldwide and is used in our due diligence assessment of our suppliers.

Experian BusinessIQ

Experian BusinessIQ provides us with key financials and credit scores to further enhance our due diligence activities.

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. ESG considerations are firmly embedded in the management of our investments as we believe we have an obligation to our members to invest their money responsibly. By doing so, we aim to achieve strong investment returns and contribute to the sustainable development of the world and society. 

We continue to divest from firms who we believe aren’t taking action fast enough to address ESG concerns, particularly in our equity holdings. For example, we divested from a healthcare provider who were being investigated for allegations of mistreatment of patients. In our assets backing annuity business we actively restrict new investments into bonds issued by tobacco or energy firms whose ESG ratings are poor. 

Focusing specifically on environmental risks and financial risks arising from climate change, the carbon footprint of our investments is regularly monitored. This is done by the Investment Committee, With-Profits Committee and other relevant management committees who review metrics covering carbon intensity and carbon emissions. The carbon intensity and carbon emissions of our investments in our With-Profits Funds are lower than the market indices. In some cases they are considerably lower, for example, the carbon emissions of our US equity fund are 14% lower than the carbon emissions of the S&P500. We regularly monitor a range of other metrics such as controversial name exposure and ESG ratings. 

In the 2023 Annual Report 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).

2022 saw the UK heat up to over 40°C - the warmest year on record according to the Met Office - and low rainfall led to droughts across the country. We believe that rapid and coherent action is needed to tackle the risks and opportunities presented by climate change on our investment portfolio. That’s why we’ve accelerated our response during 2022. You can view our 2022 highlights on page 27 of the Annual Report.

Documents

Responsible business practice information can be found in our Annual Report