LV= reported a slight increase in protection sales in 2023 with regular new business premiums up 2% to £43m, from £42m the previous year.
It said these sales generated £14m of trading profit, down slightly from £15m in 2022, were driven by “strong underlying volumes during the year, alongside pricing changes made to maintain value and manage customer experience capacity”.
This growth was despite the overall protection sales market falling to its lowest level since 2018, according to figures from the Association of British Insurers (ABI) this week.
LV= added that on a present value of new business premiums (PNVBP) basis the mutual saw its sales fall by 13% to £356m.
However, it highlighted this was “driven by interest rate increases which have decreased the present value of expected future premiums associated with the new business sales during the year”.
It’s protection arm also reported a £30m operating profit, a 50% increase from the £20m cited in 2022.
Return to profit
Overall, the mutual returned to profitability last year by posting a £107m pre-tax profit, almost completely reversing a £145m pre-tax loss in 2022.
It noted some large, positive one-off impacts in this, in particular £85m generated by UK Solvency reforms, which affected how it calculates the value of insurance contract liabilities.
There was also a significant year-on-year improvement of just over £100m, driven by the overall impact from economic fluctuations, it added.
LV= reported a capital surplus of £469m, up from £391m, and a Capital Coverage Ratio of 204%, up from 174%, which was well above its minimum risk appetite of 140%.
As a result it also allocated £30m in bonuses for eligible members, down from £35m in 2022.
Head winds of 2023
Chief executive David Hynam (pictured) said LV= had been profitable despite 2023’s many external headwinds including high inflation, rising interest rates and low growth.
“Our performance allowed us to return £30m to eligible members in the form of member bonuses,” he said.
“Since 2011, we have shared member bonuses of £385m – reflecting our commitment to driving the success of LV= so that it can be shared with our members.
“The outlook for LV= remains positive, and the business’s foundations are strong.
“As a result of our focused business strategy, we have returned a profit this year. LV= members can be confident that we are driving progress and our foundations remain strong,” he added.