2023 LV= Member Community ‘Ask our CEO’ session

Hi, I’m Samantha Preece, Chief Brand and Communications Officer and I’m delighted to welcome you today to our LV= Member Community question and answer session with LV= Chief Executive, David Hynam.

We invited participants of our online Member Community to share questions, on any topic, for David to respond to. And I’m delighted that we’ve had such a fantastic response. 

Mutuality and future of LV=

And so, David let’s start with the first question.

Some of our members have asked about LV’s mutual status and your commitment to LV= remaining a mutual in the future. Should members accept that LV= won’t seek to demutualise again?

Thank you Sam, and it’s lovely to be here.

Since I joined LV= 15 about months ago I’ve been very clear about my commitment to remaining a mutual and delivering for our members.

Our mutual business model is underpinned by a focus on delivering great customer service, improving our digital capability and managing our cost base sensibly.

And that means that we can then deliver the positive outcomes that members rightly expect. And I’m very proud that we delivered bonuses to members last year.

Also, I know our members would agree that being a mutual is about more than the money. So we joined the Association of Financial Mutuals and the International Cooperative and Mutual Insurance Federation this year, which has really strengthened our position in the mutual community.

Our online Member Community has been a huge success. I’m delighted we’ve got more than 1,800 members join us so far and we’ve got plans to work closely with the Community over time. So, to be really direct, LV= is a mutual and I’m very clear that we will remain one.

Now we know global challenges are affecting markets at the moment, so Stefan would like to know what mechanisms you have in place to spot new ones and quickly react to them?

That’s a great question, Stefan. Look we’ve got a really robust Risk Management Framework that looks at a variety of internal and external events that could impact the delivery of our business plan. And it’s worth a look at our Annual Report as that sets as it out that framework and the key elements that we look at. But over and above that, we also undertake a formal stress and scenario test where we check our business resilience. And we’ve just done that in fact for the 2024 to 2028 plan and we tested around 20 different scenarios and in each one of those, we remained robust.

Great, thanks David. James would like to hear your views on Bitcoin. Will we be adding it to LV=?

It’s one of the areas that we focus on at our Board Investment Committee is what we call Strategic Asset Allocation. And so that’s designed to reflect our investment risk appetite on behalf of our members. The short answer I’d say now is we don’t currently think Bitcoin exposure is appropriate right now so it’s one to watch rather than one to race to.

Going in a different direction now, Michael would like to know which one government financial regulation you would change and why?

That’s a very interesting question. I think the core fundamental point is that we need to retain diversity in the financial services sector, and that’s what mutuals bring. So, I say anything that encourages mutuals to thrive is where I’d like to see more support. Not quite a single regulation, but it’s in that space.

Investments and BlackRock

Russel would like to ask you how the move to a new asset manager is going and if the With-Profits Fund is growing?

Great question, thanks Russel. As the largest asset manager in the world, BlackRock has got unrivalled investment capabilities and we're delighted to be working alongside them as our new primary asset manager. I’ve spent a lot of time already with my colleagues there and I’d say the relationship is strong, it’s going extremely well and frankly, it’s everything I’d hoped it would be. So together, what we’re aiming to do is to deliver composed, well managed, consistent returns for our members right across the long term and right across all our funds.

Thanks David. Adrian has asked what our strategy is for investing in more environmentally sustainable projects?

I take ESG really seriously. I chose not to do as some others have and appoint a standalone Chief Sustainability Officer – I double hat across that because I think it’s a CEO’s job. It’s important to me, and I think it should be for all CEOs that we achieve our business ambitions within the context of our environmental impact. Given the nature of the business we’re in, predominantly of course that’s guided by our investment approach. And our work with BlackRock gives us access to their climate aware modelling, and we intend to update the design of our future investment strategies with that very much in mind.

One of our members Victoria, would like to know if you think the cost of living will impact LV= investors?

I imagine the question is most likely referring to consumers who are choosing LV= for their investments. Clearly, it’s not for me to offer financial advice, so first and foremost I’d say anyone should work that through with their financial adviser. But my view is that if consumers have got sums of money they're looking to grow, and they're interested in low-risk options perhaps driven by the uncertainty of the economy, then our Smoothed Managed Fund range could well be attractive to them.

Member benefits and rewards

Members are interested to learn more about member benefits and rewards. For example, Baljinder would like to know if there is financial help we can offer?

Absolutely, in fact, we have a dedicated Member Support Fund which can, in specific circumstances, offer financial support for those most in need. But more broadly though, there are also a range of other member benefits, which includes discount on some insurance products and on our retirement planning advice. And there’s a lot of information on our website, so it’s definitely worth a look if you’re interested.

Thanks David. William has asked if he’s able to get a bonus when his car insurance policy renews.

Since the sale of the LV= General Insurance business to Allianz at the end of 2019, we have maintained the discounts our members can get as part of our member benefits package. And yes, that does include a saving off a range of insurances. I’m conscious members need to know how to access that, and that is explained on our website LV.com.

So on that point about discounts, Matthew’s asked a question around what our plans are to reward customer loyalty?

Well we pride ourselves on offering great value products and ones which are very much in line with the market. But we also offer a range of member benefits and discounts, which we will continue to do.

Another mutual society offers the equivalent of dividends to its members. Peter would like to know if this is something LV= would consider offering its policyholders?

Well as a mutual, we can offer our members a mutual bonus which we might say is our version of paying a dividend to members. It’s different language but it’s a very similar principle. And since we introduced the mutual bonus in 2011, we’ve given a total of nearly 290 million pounds back to eligible members so I definitely see that as similar construct.

LV= products and services

David, Andres is interested to know if we're launching any new insurance products or entering into different markets?

I’m a big believer in sticking to what we’re good at and making that even better. We're specialists in investment, retirement and protection solutions, as well as in the multi-assets investment funds space through our Smoothed Managed Fund range. And we're always looking at how our products and services can consistently meet both current and future needs of our customers. And a good example of that would be our LV= Equity Release proposition where we recently launched two new Lifestyle products and that forms part of a wider strategy to offer more options to equity release advisers and to expand our presence across that market. So that’s the kind of expansion I’m keen to make sure we continue.

On that point in regards to products and services, Denise is querying how she can find out what products are available to her as she doesn’t see any LV= advertising in her local area. What would you suggest?

Well we do show our full product offer online at LV.com, so that’s worth a look, but also we offer some life insurance products and retirement advice directly through our own team and the remainder are accessed through financial advisers. And we always try to make sure that advisers are equipped with all the information that they need to advise on our propositions.

And something that I know we’re really proud of is the My LV= platform. So Philip has asked a question around it. Are there any plans to include access to tools to calculate how his pension is performing?

Thanks Philip for your question. Firstly, I’m delighted you’re accessing and using our My LV= portal. The short answer is yes, it is our plan to build out additional functionality over the coming months so that My LV= will enable members to see and do more. And that’s a bit of work in progress at the moment and I’ll make sure we feed in the suggestions that you’ve made. Thank you.

David, some members have asked questions around some confusion about the LV= brand being used for general insurance products?

This does come up from time to time, and understandably so. At the end of 2019 we sold the General Insurance business which includes travel, motor, home and pet insurance, to Allianz Holdings plc. And Allianz is a completely separate business entity, it’s not ‘ours’ if you like. However, we granted a license for Allianz to continue to use the LV= brand for that suite of products. And that license continues and is due to remain in place over the next few years.

We’ve got a very clear legal and governance framework in place to manage how the LV= brand gets used and that provides the right sort of protection for LV= Life and Pensions. And our members benefit from the investment that that agreement brings. And whilst most of our products are sold through financial advisers, we have exceptionally high levels of brand awareness directly from consumers and that’s benefiting from investments in the promotion of our brand through the advertising of motor and home insurance.

Regarding customer confusion, Allianz are much clearer with their own customers about the business they own.

I’d stress again that we don’t have any ownership of that business any longer but we do, however, allow Allianz to utilise the LV= logo and the LV= brand.

LV= Board and Diversity

We've had a question in about the LV= Board, of which you are a member. Chris would like to know what we are doing to identify and develop members who could stand for election to the Board.

Thanks Chris, and as you’ll know the Life and Pensions sector is a heavily regulated industry and regulators expect board members and Boards overall to demonstrate the appropriate experience and skills that you need to operate effectively. The Board has to account to regulators for ensuring that the business operates in that effective and safe way. So whilst I don’t rule out members being directors, all the usual protocols, such as identification, selection, assessment, technical knowledge would all still apply and we’d always use the accepted external board selection practices to identify relevant candidates. There would also of course, have to be a vacancy.

David, Bernard has asked about diversity at LV=, can you tell us a bit more about that?

Well, for those who followed our Annual General Meetings and followed my messages online and other forums, you’ll know that diversity and inclusivity are very high on our agenda and it’s an area I personally feel very passionately about. Not just at LV=, but in business and in the community more broadly. And I’ve got a strong view that the more our teams can represent you, our members, then the better we can serve you.

We’ve got four colleague-led networks across LV= which are trying really hard to ensure we’re being the best LV= we can possibly be. And I want colleagues to be able to bring their whole selves to work and to just do the best job they possibly can. But I also want to recruit and retain the best talent that we can get. Personally, I think we’re making great strides across LV=, but of course there’s more to do and it’s a good reminder to me this question to make sure we’re providing updates on it in our member communications. So expect to hear a bit more from me on it soon.

Thanks David, that brings us to the end of the question and answer session today.

Thank you Sam. And a big personal thank you to all the members who took the time to send me a question. I thought there were some very insightful and valuable points and I really appreciate it.