Rising car insurance prices and strong demand for specialist annuities created a surge in British mutual insurer LV= sales. LV=, formerly Liverpool Victoria, had life insurance sales of 63.5 million pounds ($97.6 million) in the first six months of 2010, an increase of 40 % compared to 2009, while general insurance sales rose 37 percent to 546.4 million pounds.
The company is one of Britain’s largest customer-owned financial services groups whose main UK rivals include fellow mutually owned Royal London as well as Aviva, RSA, Prudential and Legal & General. The company added that profit also rose but did not disclose figures. Chief Executive Mike Rogers said the society was strongly capitalised, but said he kept an open mind about whether surrendering its mutual status or merging with a rival would make it more resilient.
“If we ever concluded that it would be better for the policyholders to seek some form of capital injection or other ownership structure then we would do what was right for them at the time,” he said.
Earlier in the year a possible tie-up was discussed between LV= and fellow mutual insurer Royal Liver. In 2013 new capital rules for European insurers will come into force and smaller players will be under pressure to join forces. LV= said its life division benefited from numerous demand for enhanced annuities, which offer higher returns to fragile policy holders. Britain’s enhanced annuity market grew 41% in the first half of the year according to consultants. The increase in general insurance sales was fuelled in part by higher motor insurance premiums, reflecting an industry-wide surge in prices as insurers seek to offset a sharp rise in claims expenses.