Barry Cudmore, Chief Financial Officer, pointed to LV=’s resilience in the face of economic challenges. He said:
“Despite a challenging year, LV= proved resilient and overall we saw good financial performance in 2021. We were well capitalised and we made good progress on volumes, margin and efficiencies. We also outperformed our key targets, including our new business sales and profitability targets.
“We aim to deliver strong investment returns for members by targeting with-profits returns at or above the benchmark.
“Our main With-Profits Fund delivered a good overall return for 2021 of 6.8%. The average return over the last three years was just over 10%
“The total profit related bonuses we shared with members in 2021 was £38 million.
“We were able to share this 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.
“Looking to 2022 and beyond: businesses and society face very challenging times. As a business, we will do all we can to prepare for any market volatility and weather this. However, we are not immune and like all businesses, we will feel the effects of external pressure and believe there are some strong headwinds. As a leadership team we will continue to make business decisions ensuring we are financially robust and are doing what is right for our members and advisers.”
Clive Bolton, Managing Director of Protection, Savings and Retirement talked about the transformation of LV=’s business:
“In the period leading up to 2019, LV= was in a very different place to where it is now. The business was suffering from reducing sales in key areas and there was no focus around who
LV=’s target customer was. The business was not clear on where it should be competing, nor its offer to the market.
“The cost base was high and the ageing IT infrastructure made us difficult to do business with. In addition, the With-Profits Fund was reducing in size due to increasingly low sales of with profits investment products and this seriously restricted the ability for the business to invest in its future.
“Our challenge was to develop and implement a plan that would address these issues and create a strong and sustainable business fit for the future.”
LV=’s four-pillar turnaround strategy has led to an improved financial performance:
- “Firstly, Smoothed Managed Fund flows have more than doubled in 2021 contributing to the health of the With-Profits Fund. This is a significant achievement.
- “Similarly our Protection sales have increased substantially as we started to refocus the business on larger cases and premium products.
- “Expenses have been reduced as we remove the Group cost not required after the sale of the General Insurance business and aligned company resources more effectively to the strategy.
- “Finally, most pleasing has been the return to profitability for the new business in 2021.”
Jo Noone, Director of Customer and Adviser Experience spoke about the importance we place on delivering for our customers and members:
“In 2021 we paid out over £119 million pounds in life insurance, income protection and critical illness claims. We always look to pay a claim in line with our terms and conditions, and so far this year we have approved and paid 97% of all life claims submitted to us.
“The speed at which we pay claims is important too. We have already made significant improvements across all areas, for example the time it takes us to pay protection claims has improved to an average of 4 working days, down from 14 days.
“At LV= we have a robust review process with 72% of complaints being resolved within three days, compared to the market average of 50%.
“The Financial Ombudsman Service upheld 95% of referrals to them from members appealing our decisions, compared to the market average of 63%.
“Our complaints team has recently been recognised as a winner in the Collaboration Network Awards for the Best Approach to Complaints.”