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LV protection sales jump by 36%

  • 27/04/2015
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LV protection sales jump by 36%
Protection sales at LV have increased by 36% to £75m in the first three months of 2015, fuelled by strong performance in its income protection and term assurance products.

LV said despite uncertainty in the retirement income market in the build up to the implementation of the pension freedoms, retirement also performed well with sales rising 15% to £334m.

However, this was mostly fuelled by sales in pensions and flexible guarantee bonds which increased 58% and 110% respectively, while sales in annuities dropped by 39% to £70m and equity release by 38% to £18m.

Overall life business at the insurance and pension provider experienced a boost of 19% from January to 31 March 2015, with sales rising from £346m to £412m.

Sales in heritage savings and investments plummeted by 50% to £3m compared to £6m on the previous quarter.

Richard Rowney, managing director LV life and pensions, said: “The increase in protection sales is driven by strong performance in both our income protection and term assurance product lines. Our Personal Sick Pay policy has proved very popular and we have simplified our application process to make it even easier for advisers’ existing customers to benefit from this product.

“The 58% increase in pension sales and a 110% increase in flexible guarantee bond sales indicate that we are witnessing a change in the buying behaviour of those planning and approaching retirement. In pensions, more retirees are selecting income drawdown products and this is reflected in the decrease in annuity sales, which the industry anticipated following the Budget changes announced last year,” he added.

Rowney said despite the downturn in annuities sales, there was still demand for certain products among savers who wanted a guaranteed pay out.

“However, we are seeing continued demand for fixed term annuities amongst those who want greater income flexibility, and want an investment guarantee. Our flexible guarantee bonds are proving to be very popular with those approaching retirement, resulting in sales year-on-year more than doubling. Equity release sales have reduced but remain in line with our 2015 plan.”

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