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LV= life and pensions sees 20% leap in sales

28 July 2015 | LV= commentary

Life and pensions specialist LV= issues its trading statement for the six month period from 1 January to 30 June 2015.

  1. Retirement sales increase by 15% driven by a rise in demand for income drawdown
  2. Protection sales increase by 50% across core lines
  3. Sales of fixed term annuities overtake enhanced annuity sales
  4. Sales of flexible guarantee bonds increase by 136% as retirees look for alternative financial solutions

6 months ended 30 June 2015

6 months ended 30 June 2014

Percentage change

12 months ended 31 December 2014

Life overall (PVNBP[i])










- Pensions





- Annuities*





- Flexible guarantee bond





- Equity release










*Annuities sales can be broken down as Enhanced £55m (2014 H1: £137m) and traditional fixed term £91m (2014 H1: £77m). Our one year fixed term annuity product was sold to support consumers in advance of the budget reforms coming into effect. LV= no longer sells this product now that reforms are in force (2014 H1: £18m).

** The impact of changes in 2014 year end reporting assumptions on Protection Present Value of New Business Premiums (PVNBP) is an increase of £9m for the six months ended 30 June 2014 and an increase of £20m for the 12 months ended 31 December 2014. If this impact is allowed for the underlying increase in year-on-year Protection sales on a PVNBP basis is 37%

Richard Rowney, Managing Director of LV= Life & Pensions commented: “Our life business has performed strongly in the first six months of 2015 with sales up 20% overall. In protection we have seen an increase of 50% and retirement sales have increased by 15%. The latter has been driven by the pension reforms which came into force on April 6 increasing pension savers’ awareness of the alternative retirement income options now available to them, attracting them to providers like LV= that offer a full range of ‘at retirement’ solutions.”

We have invested in our retirement business to further enhance our proposition and provide additional support, training and tools to advisers, in order to help them prepare and make the most of the pension changes. We believe more pension savers are blending solutions in order to achieve the level of income and flexibility they require and we have innovated in this area. To help advisers determine the combination of products that would best serve their client needs we created our Retirement Pathfinder, a retirement scenario modelling tool. In conjunction with our pathfinder tool we have also developed and launched our Retirement Account which enables blends of our drawdown and annuity products to be sold as one proposition and further demonstrates our expertise in the retirement income market.

The 45% increase in pension sales has been driven by a rise in demand for income drawdown. The 18% increase in traditional fixed term annuity sales means that they are now more popular than enhanced annuities, in which we have seen a decrease. This indicates that more pension savers are looking for an income solution that offers them flexibility but still want an investment guarantee. We believe demand for fixed term annuities will continue to grow, especially amongst those who reach retirement in good health as these will typically offer them a better return than a standard annuity. Our flexible guarantee bonds are proving to be very popular with those approaching retirement, resulting in year-on-year sales increasing by 136%.

The increase in protection sales reflects growth in all of our core protection lines - income protection, term, critical illness and whole of life product sales have all increased year-on-year. We continue to drive growth in the income protection market and we are now running additional Wake Up To Income Protection seminars. These are designed to help advisers that don’t currently sell income protection to discuss these products with clients.

In order to make it even easier for advisers to do business with us, we recently upgraded our adviser website. The new technology makes it easier for advisers to navigate it on their smartphones and they and their clients can now use the new site to book tele-interviews for themselves. This will further speed up the protection underwriting process meaning that clients can get access to valuable financial protection quicker.

[i] Present Value of New Business Premiums (PVNBP) is the total of new single premium sales received in the year plus the discounted value, at the point of sale, of the regular premiums we expect to receive over the term of the new contract sold in the year. For equity release this represents the amount of loans provided.

Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK