Bain Capital has released a statement committing itself to “significant” investment in LV= to grow its policy holders to more than two million and boost life insurance and managed fund product sales.
Ahead of the special general meeting on 10 December where members will be asked to vote on the £530m acquisition of LV= by Bain Capital, the US private equity firm revealed its investment will follow three key objectives:
- To increase policyholders from 1.2 million to over two million;
- To reclaim its position as a top three provider of life insurance products;
- To “double smooth” managed fund product sales and extend the footprint of its equity release mortgage product.
According to the Swiss Re Term Watch data for 2020, LV= was outside the top five providers for new term life insurance and critical illness sales last year.
It completed 20,429 income protection sales, the fourth highest just behind Royal London’s 20,590, but was significantly behind Legal & General and Aviva which had 37,488 and 34,601 respectively.
The Bain Capital commitment follows LV= telling members earlier this month they would each receive £100 cash and increases to with-profits policy payouts if they approve the deal.
Reports in national press also suggest fellow mutual Royal London is still interested in securing a deal to buy LV= after being turned down in the initial bidding process.
Matt Popoli, a managing director of Bain Capital, said: “Our proposed investment maintains an independent LV= and is predicated on LV=’s inherent significance, its heritage and brand.
“To be sustainable and achieve long-term success, LV= needs capital to address its heavy debt pile, fund its pension liabilities and invest for growth.
“With-profits members should not bear the burden of this investment. As a result of the transaction, LV= will be strengthened with access to more capital and structured with less debt.”
Bain Capital added it planned to reinvest capital in the business to enhance LV=’s IT infrastructure, operations, product development and customer service.
It has also further committed to maintaining a presence at LV=’s three existing sites, invest in the communities LV= supports and preserve LV=’s 178-year-old mission, vision and values to serve policyholders and provide them with affordable and valuable insurance products.