Despite delivering a strong boost to its life and pensions business with an operating profit of £28m up from £12m during the same half last year, LV’s overall performance suffered as its general insurance business saw a staggering drop in profits from £70m to £22m a year later.
Flat home insurance premiums were blamed for the drop off as underwriting profits within general insurance fell by 85% to £8m.
Financial highlights within LV’s life and pensions business included a 37% rise in new business before investment in new propositions to £26m. Its retirement solutions business, which includes pension, annuities and lifetime mortgages helped drive this boost with a 20% increase in new sales to £863m. Meanwhile, new life business sales were up 17% to £1.1bn and protection sales rose by 1% to £146m.
Richard Rowney, LV= group chief executive, said: “I’m particularly pleased with the performance of our life & pensions business where total sales have broken through the £1 billion mark with growth in all product lines. We continue to see a trend towards blended and hybrid products following the government’s pension reforms as people increasingly exercise their ability to choose how they fund their retirement.
“We are operating in a prolonged low interest rate environment with significant volatility and this has created challenging market conditions. We will remain disciplined in the management of the business, exercising strict controls over the allocation of capital to the right product areas.”
LV has invested heavily in digital propositions over the past few years, becoming the first provider to launch a fully regulated online robo-advice service for the at-retirement market last year.
The firm has also launched its Fastway quote and apply system which combines the benefits of technology with human advice and will be available to all intermediaries by the end of the year.