LV=, the insurer trying to recover from a failed sale, shared £38 million of profits with its members last year, it said today.
The mutual announced the payout as it reported rising profits and new business.
That would seem to put a dent in claims by management that it needed to sell up to a deep-pocketed rival in order to secure its future.
Last year members blocked a takeover by US private equity firm Bain Capital. Talks with Royal London failed in February, for the second time.
Today Mark Hartigan, the CEO who was pushing the Bain deal, said: “LV= has outperformed both our new business volumes and profitability targets with significant growth in sales and trading profit.“Thanks to the progress of our plan to transform the business we start 2022 well capitalised and clear in our future plans. We look forward with confidence to a sustainable future for LV= as part of a vibrant mutual sector.”
That’s a notable change of stance. Hartigan had previously argued that LV= faced an uncertain future without either a merger or a sale.
His chairman Alan Cook left following the takeover failures, but new chairman Seamus Creedon says Hartigan should stay.
LV= said there had been “significant operational progress made towards a sustainable future.”
The insurer recently appointed a new chief financial officer, chief operating officer and chief risk officer.
The business made a trading profit of £29 million last year, up from £9 million in 2020. New business sales rose 21% to £1.25 billion.
Hartigan added: “I am pleased that we have been able to share £38 million with our with-profits members through a mutual bonus of £28 million and an exit bonus of £10 million introduced following the sale of the general insurance business. Through the success of our Smoothed Managed funds we are replacing smaller legacy policies in the With-Profits fund with larger investments.”
LV was founded in 1861 to help poor families pay for funerals. Members were worried that a private equity takeover would cause the business to lose its core values.
