LV= more than doubled trading profit from its protection business in 2022 with new protection sales rising 8% on the previous year.
The mutual completed new sales of £42m in regular premium terms, up 8% from £39m in 2021, according to its financial results for the year to 31 December 2022.
It added these sales would continue to generate premiums for the business over the coming years, and generated £14m of profit, up from £5m in 2021, driven by the increase in volumes during the year and improved margins, it said.
On a present value of new business premium basis LV= completed £357m of sales, also up 8% from 2021 and following a year in which this figure had risen by 32%.
LV= also saw trading profit from its overall protection business grow by 111% to hit £19m from £9m in 2021. In 2020 the mutual posted £2m in trading profit from its protection business.
However, overall operating profit across the group of £31m was unchanged from the previous year and trading profit from the group’s savings and retirement business more than halved on the previous year, slumping to £10m in 2022.
In a statement sent to Health & Protection the mutual said there was “no doubt” that the current economic situation and uncertainty was posing challenges for customers.
“Despite many people being affected by rises in the cost of living, they recognise the important role protection has to play in protecting their finances in case an accident or illness prevents them working,” the statement added.
“LV= has increased sales in a difficult market because we have launched new products offering consumers more flexibility and we have ensured that the menu proposition remains competitive.”
Not immune to economic challenges
It was a theme picked up David Hynam, chief executive of LV=, (pictured) who said the business and its customers were “not immune“ to these challenges.
“We are not immune to this and we know that our members will be no less affected, not least by the rising cost of living,“ Hynam continued.
“Despite these challenges, and as a result of our focused business strategy, the outlook for LV= remains positive.
“Despite difficult market conditions, we have traded well with our protection, equity release and annuities products all exceeding their 2021 sales levels.
“Since joining LV=, I’ve been focused on driving forward the next steps in our business strategy.
“My goal is to forge a collaborative, inclusive business environment where we do all we can to achieve the best outcomes and returns for our mutual members.
“We are already delivering on our members-first philosophy, having shared member bonuses of £35m.”
Hynam noted the insurer had expanded its protection portfolio including launching a more affordable critical illness product.
“The business continues to have strong foundations, and despite increasing inflationary pressures, we have maintained tight and largely flat operating costs,” he continued.
“LV= members can be confident that we are doing our utmost to deliver the value for money they rightly expect in tough economic times.”
Gender pay gap up
But the group’s annual report also revealed that in 2022 LV=’s gender pay gap increased to 31.5% from 25.5% in 2021 driven by a reduction in the number of senior positions within LV= being filled by women.
Natalie Ceeney, chairwoman of LV=’s remuneration and nomination committee, added: “Our reported gender pay gap of 31.5% is slightly better than the broader financial services sector, which is currently at 32.2%.
“However, it’s worth stressing that a gender pay gap increase does not necessarily mean a worsening of diversity, as the gender pay gap is driven by the structure of LV’s workforce, where there is a higher representation of women in lower graded roles and there are fewer women in senior roles.
“Recruiting more women into the workforce at a first-line level can therefore worsen our gender pay gap in the short term.
“At the same time, we recognise that we do not have the level of diversity in our senior management team that we would like and we are therefore committed to seeking diverse talent for all of our recruitment.“