2019 is an important year in the evolution of LV= as we establish the foundations from which to build a better mutual for the future. In the first six months we successfully negotiated an improved sale price for our remaining shareholding in our General Insurance business to Allianz, representing a good deal for our members. We also achieved member support for our important plans to convert to a company limited by guarantee.
Life trading profits of £18 million (HY 2018: £27 million) have reduced due to a combination of factors including the continued decline in pensions to levels seen prior to the 2015 freedom and choice reforms, and on-going investment market uncertainty. Trading profits are offset by experience variances, group costs and one-off items including model and basis changes and higher interest on Heritage redress payments resulting in an operating loss from continuing operations of £27 million (HY 2018: £27 million profit).
Profit before tax from continuing operations of £35 million (HY 2018: £12 million) reflects improving investment markets partially offset by subordinated debt interest and costs associated with the planned conversion to a company limited by guarantee.
Our capital position continues to be strong and our Capital Coverage Ratio stands at a healthy 158%, compared with 172% at the end of 2018 with the reduction largely due to short-term market movements and restructuring costs. At this level it is still well within our risk appetite and we expect it to strengthen at year end following completion of the sale of the General Insurance business to Allianz.
One of the foundations of our success over the years has been the strength of the LV= brand and this remains in good health. Our ambition is to be best loved by advisers and our net promoter scores among IFAs in the first half of the year placed us in the top quartile for both protection and retirement.
Following the announcement of the sale of our remaining stake in LV= General Insurance to Allianz, we now treat this business as discontinued in line with IFRS reporting standards. The Group’s share of the GI result at £29m (HY 2018: £5m) is in line with expectations. We remain on track to separate the business by the end of 2019, well ahead of the original plan, and the value of this transaction will be reflected in our 2019 full year results.
Trading conditions for Life & Pensions remain tough and while the protection market is growing steadily, investment and pensions markets are down sharply driven by investor uncertainty and the continued decline in defined benefit to defined contribution transfers. These trends are reflected in our results with overall new business sales of £710 million (HY 2018: £970 million).
Savings & Retirement sales of £560 million (HY 2018: £818 million) have been adversely impacted by the continued decline in the pensions market since its peak in 2017 and a slowdown in sales of our flexible guaranteed products due to market uncertainty in the lead up to Brexit. In June we launched a stocks and shares ISA alongside a repositioning of our flexible guaranteed products to create a suite of smoothed managed funds. The funds, which have previously only been available as bond and pension products, reduce the impact of short-term market fluctuations for investors through the unique and proven LV= smoothing mechanism. Support from IFAs has been positive and the pipeline is looking healthy.
Protection sales of £150 million (HY 2018: £152 million) have been driven by strong performance in our market leading income protection proposition. We continue to invest in developing our offering in this area and in the first six months have extended our Dr Services benefit to include access to physiotherapy and psychological experts and have chosen Square Health to undertake all new nurse screenings, medical exams and laboratory tests.
During the first six months of 2019 we appointed Clive Bolton (previously Managing Director of Retirement Solutions at Aviva Life UK) and Debbie Kennedy (ex Group Head of Protection Strategy at Royal London) to lead the Savings & Retirement and Protection businesses respectively. These appointments reflect our increased focus on the two Life & Pensions trading businesses where Clive and Debbie bring the necessary deep expertise and experience to help LV= win in its core markets.
By the end of 2019 we will have completed our transition to a pure Life & Pensions provider with a clear focus on the low risk, advice led, mass affluent market. We look to the future with confidence as we build momentum across Savings & Retirement and Protection while continuing to provide a good service to our Heritage customers.
