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Catch up with the latest press releases from LV=

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LV= General Insurance doubles profits in 2011

Press release: 27/02/2012

2011 financial highlights:

  • Premium income grew by 23% to £1.46 billion

  • Trading profits more than doubled to £72.1m

  • The combined operating ratio (COR) improved by 6.5 percentage points to 97.7% from 104.2%

  • Return on capital employed (ROCE) increased to 12.9%

  • 500 new jobs created in 2011

  • LV= is the UK's fourth largest car insurer with c.10% market share


2011

2010

Gross written premiums

£1,456m

£1,182m

Trading profit*

£72m

£30m

Profit before tax

£70m

£35m

Loss ratio

74.5%

79.6%

Expense ratio

23.2%

24.6%

Combined ratio

97.7%

104.2%

Return on Capital Employed

12.9%

8.2%

Motor in force policies

2.9m

2.5m

Total in force policies

3.9m

3.4m

*Trading profits are underwriting results plus investment income


These results were achieved against a challenging backdrop. Investment markets suffered from high levels of uncertainty and volatility, resulting in poor returns across most asset classes. The LV= general insurance investment portfolio generated an overall return of 2.8%, down from 5.7% in 2010.

In our motor insurance business, the benefits of a reduction in the frequency of car accidents were offset by a further increase in personal injury claims and attempted fraud. We have adopted a strongly proactive strategy to claims management. Our policy is to settle valid claims in full as rapidly as possible, while at the same time adopting a rigorous and challenging approach to fraudsters.

John O'Roarke, managing director of LV= general insurance, commented: "This is a very strong set of results in an extraordinarily challenging year. For the fourth year in a row we have managed to combine top-line growth with strong bottom-line improvements. The commitment and energy of everyone in our business has made this possible and it's a great privilege to be working with them."

Strategic progress

2011 saw continued growth across all distribution channels. The two core business areas, targeting the direct and broker channels, now underwrite 2.3 million and 1.5 million policies respectively.

The direct business continued to grow strongly, increasing the number of in-force car insurance policies by 36% to 1.52 million. Gross premiums written in car insurance rose by 53% to £578 million.

LV='s broker channel business continued to grow. In total, broker channel premiums written grew by 9.6% to £720 million. Motor personal lines sales were up by 4.7% to £572 million. In commercial lines, LV= achieved further strong growth in premiums written - an increase of 29% to £138 million. Within this, SME premium income increased by 27% to £54 million and commercial motor business grew by 30% to £84 million.

Commenting on the outlook for 2012, John O'Roarke, said: "LV= has gone through a significant period of transition and we are now moving onto the next stage. Our focus for 2012 and beyond will be on increased profitability along with steady growth. We believe that the quality of our portfolio and the excellent rapport we have with our customers will enable us to generate sustained growth in underlying profits over the coming years."

Mike Rogers, LV= Group CEO commented: "Our general insurance business goes from strength to strength and, along with our fast growing retirement and protection business, has played a key role in the recent success of LV=."




About LV

LV= employs over 5,000 people and serves over five million customers with a range of financial products. We are the UK's largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trades unions.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF. www.LV.com.