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LV= announces annual results for 2008

Press release: 27/03/2009

Mutual insurance, investment and pensions group LV= has announced its annual results for 2008.


2008 Financial highlights

  • Group operating profit up 128% to £62.8m (2007: £27.5m).

  • Gross premiums up 38% to £917m (2007: £665m).

  • Capital resources of £1.1bn (2007 £1.3bn).

  • Group IFRS loss after tax £202m reflecting short-term investment fluctuations (2007: profit £50m).


Delivering for LV= members in difficult times

  • Financial strength was retained, with Group capital surplus 2.1 times the level required (2007: 1.8 times).

  • Significant turnaround in operating performance in just two years, from a loss in 2006 to an operating profit of £62.8m in 2008.

  • Managing the business for the long term benefit of LV= members: during 2008 our financial strength allowed us to absorb short-term investment market fluctuations whilst retaining significant holdings in long term growth assets (around 73% at the year end), which we believe will benefit members in the longer term.

  • LV= policyholders with a 25 year with-profits policy maturing in February 2009 were at least 22% better-off than equivalent policyholders with major proprietary companies.

  • The average value of a maturing LV= 25 year with-profits policy fell by only 1.2% year-on-year, despite a 32% fall in the FTSE All Share in 2008. This demonstrates the benefits of smoothing and LV=’s financial strength. Cazalet Consulting’s latest with-profits provisional indicators report gives LV= full marks ie 10/10.

  • LV= customer satisfaction in 2008 was held at 95% overall.

  • Strong growth in LV= member numbers, up to 1.13 million members at the year end (2007: 937,000).


Strategic progress

  • The acquisition of Highway Insurance in October 2008 accelerated our ambitions in the General Insurance broker channel. Excluding Highway, GI premiums grew by 19% from £342.9m in 2007 to £423.5m. The business remains on track to achieve its top five car insurer ambition by 2012.

  • The successful integration of the Retirement Solutions business, acquired from Swiss Re at the end of 2007, drove an 83% growth in new business income for our Life business. Enhanced annuities showed particularly strong sales growth and significantly improved market share.

  • During the year we were chosen as the product partner for Nationwide Building Society’s car, SME and travel insurance, and we also launched a new life insurance partnership with Standard Life Direct.

  • The orderly wind-down of our banking subsidiary continued according to plan.

  • The growth strategy for our Asset Management business developed apace with significant product launches and third party mandate wins, including a £100m property mandate.

  • During the year we successfully brought our IT and HR capabilities back in-house from out-sourced providers, improving operating efficiency.

  • LV= received widespread industry award recognition for product quality across Life, GI and Asset Management, including winning the Moneyfacts award for best protection provider.


Mike Rogers, LV= Group Chief Executive, commented: “Throughout a turbulent year our single-minded focus on helping our members and customers to look after what they love has held us in good stead. The very strong growth in operating profit reflects significant progress over the last two years in re-shaping our business portfolio and strengthening our organisational capabilities. This was underpinned by strong sales growth across our GI and Retirement Solutions businesses, and by our withdrawal from banking.

“Our focus on high quality, long-term investments has allowed us to maintain our relatively strong investment performance and financial strength, despite very volatile short-term markets. In particular we have had no direct exposure to failing Icelandic banks, nor to the sub-prime mortgage market.

“Trading has started well in 2009, with sales in the first two months strongly ahead of the same period last year, although investment markets remained volatile.”

The 2008 Annual Report & Accounts for Liverpool Victoria Friendly Society Limited can be found at www.lv.com/agm2009.

LV=

LV= is a registered trade mark of Liverpool Victoria Friendly Society Limited (LVFS) and a trading style of the Liverpool Victoria group of companies. The new LV= brand identity was launched in March 2007.

LV= employs over 3,800 people, serves around 3.2 million customers and members, and manages around £7 billion on their behalf. We are also the UK’s largest friendly society (Association of Friendly Societies Key Statistics 2008. Total net assets) and a leading mutual financial services provider.

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

www.LV.com