LV= General Insurance increases operating profit by 55%

Leading personal lines insurer LV= General Insurance Group (LV= GI) announces its interim results for the six months ending 30 June 2019.

Strategic and operational highlights:

  • Customer numbers increased by 8% to 5.5 million
  • Named Best Insurance Provider at annual Which? awards
  • Ranked 10th in the Institute of Customer Service UK Customer Satisfaction Index, up 32 places
  • Launched the UK’s first car insurance product developed solely for electric cars
  • Allianz UK signed an agreement to buy out remaining 51% of LV=GI and announced the acquisition of 100% of Legal & General Insurance Limited (subject to regulatory approval) which it intends to combine with LV=GI in early 2020


Financial highlights:

  • Gross written premiums up 12% to £775 million (HY 2018: £696 million), excluding discontinued business lines [1]
  • Operating profit up 55% to £35 million (HY 2018: £23 million), which has been negatively impacted by Ogden impact of £13 million
  • Operating expenses down 2% to £160 million (HY 2018: £162 million)
  • Combined ratio of 96.8% (HY 2018: 95.7%), excluding Ogden impact COR of 94.6%
  • Credit rating from Standard & Poor’s raised to AA-


Financials (including discontinued business lines):

  HY 2019   HY 2018  Change (%)
Premium income  £775 million  £827 million  -6% 
Operating profit  £35 million  £23 million  55% 
Underwriting profit  £19 million  £26 million  -28% 
Expense ratio  22.9%  23.5%  -0.6% 
Combined ratio  96.8%  95.7%  1.1% 


Steve Treloar, LV= General Insurance Chief Executive, said: “The business has performed exceptionally well in the first six months of the year, with growth in profit, revenue and customer numbers.

“We’ve successfully delivered underlying premium growth of 12%, excluding discontinued business lines, to £775 million (HY 2018 £696 million). Our customer base increased by 8%, meaning we’re now providing products and services to 5.5 million customers, a strong growth rate in a very competitive market. Growth has been driven by both distribution channels, with Direct business premiums up by 8% thanks to the success of our Multi Car product, the competitive position of our Home product and the launch of Home Plus. The Broker business has delivered growth of 22%, excluding discontinued business linesi, as a result of the success of the migration of the personal lines business from Allianz, our broadened product offering and a good performance in our specialist lines.

“Our award winning service continues to attract and retain customers with satisfaction levels remaining very high and our net promoter score increasing to +72.3 (HY 2018: +69.4). Our great products and services were also recognised by Which? who named us Best Insurance Provider of the Year at the 2019 awards, and LV= GI was ranked 10th in the Institute of Customer Service UK Customer Satisfaction Index, up 32 places from the previous year. 

“The first half of the year also saw us launch the UK’s first ever car insurance product developed solely for electric cars. After a considerable amount of research into this market, it was evident that these cars have very specific needs which our new product addresses to ensure that drivers have the right cover to protect themselves.

“Allianz’s commitment to our business was also further demonstrated after the company confirmed that it was buying out the remaining 51 per cent stake of LV= GI, which will result in them owning 100% of our business by the end of 2019 whilst continuing to trade under the LV= brand. Allianz UK also announced the acquisition of Legal & General Insurance Limited (L&G GI), subject to regulatory approval, and confirmed it intends to combine the  business with LV= GI once the deal is complete. Following this announcement, our credit rating was raised by Standard & Poor’s to AA-, indicating that we are in a very strong place to meet our financial commitments to our customers and other stakeholders. This is clearly an exciting time for us and we’re looking forward to welcoming L&G GI into the LV= family and also becoming part of the wider Allianz Group.”

Kevin Wenzel, LV= General Insurance Chief Financial Officer, added: “In the first six months of the year we maintained strong underwriting and pricing discipline as well as good cost control which resulted in us delivering a robust set of numbers. Our operating profit of £35 million is 55% higher compared to the previous year which is a great achievement, particularly when you consider that it would have been £48 million had it not been for the £13 million impact of Ogden. Prior years contributed £10 million (2018 H1: £21 million) before impact of Ogden rate change.

“As a result of maintaining our focus on managing the cost base, our expense ratio improved and at 22.9% is down 0.6% (HY 2018 23.5%), resulting in an underlying COR of 94.6%, excluding the impact of Ogden.  

“Our underwriting result of £19 million is below HY 2018 (£26 million), due to both the Ogden discount rate and non-injury claims inflation. However investment returns at £16 million are higher than last year (HY 2018 -£3 million), with 2018 impacted by market movements on hedges protecting the Solvency II balance sheet.
“We were hugely disappointed by the decision of the Ministry of Justice to change the personal injury discount rate to -0.25%. Following guidance from the Government that the new rate would be between 0-1%, in 2018 we revised our assumption for the Ogden Discount Rate to 0% but with the rate now being lower it has negatively impacted our business and resulted in claims being increased by £13 million. We have always been committed to providing the fairest possible settlements to our most seriously injured road users but at -0.25% we believe that claimants will remain over-compensated, thus undermining the common law principle of 100% compensation.”

Commenting on the future outlook of LV= GI, Steve Treloar concluded: “We enter the second half of the year with our business in excellent health. We have a clear strategy and we’re excited about the future. With Allianz set to become our sole parent in 2020 and L&G GI joining our business I’m confident that we’ll continue to develop the great products and deliver the fantastic service that LV= has become well-known for providing to its customers.” 



Kaidee Horton
Head of Corporate Communications (General Insurance)
07738 274 568

Notes to editors

These numbers are unaudited.

Certain statements in this press release may constitute "forward-looking statements". These statements reflect the Issuer's expectations and are subject to risks and uncertainties that may cause actual results to differ materially and may adversely affect the outcome and financial effects of the plans described herein. You are cautioned not to rely on such forward-looking statements. The Issuer disclaims any obligation to update their view of such risks and uncertainties or to publicly announce the result of any revisions to the forward-looking statements made herein, except where they would be required to do so under applicable law. 

[1] Discontinued business lines refers to the LV= Commercial Broker portfolio which we started transferring to Allianz in September 2018 as a result of the strategic partnership.