LV= continues to diversify
LV= has today unveiled its full results for the year to 31 December 2014, with the group witnessing ‘good growth in other products’ besides personal motor insurance, its most significant business line.
Group operating profit was down to £86m (2013: £105m), however general insurance operating profit was up to £92m from £81m in 2013 reflecting strong underwriting results.
The group saw a continued growth in customer numbers to 5.7 million (2013: 5.5 million); primarily driven by growth of over 180,000 in general insurance policies. There was too progress in its diversification strategy for general insurance with strong growth in home, commercial and road rescue business lines.
Mike Rogers, LV= group chief executive, said, ‘2014 was an eventful year for our members and their Society so I am pleased to announce a solid operating profit of £86 million and an increased mutual bonus of £24 million; meaning we have allocated an extra £86 million to members over the past four years.
‘Our general insurance business had an excellent year with good profit growth despite continued price competition and strong increases in our home and commercial customer bases as we delivered on our diversification strategy.’
‘The general insurance business continues to achieve excellent results and good profits despite continued depressed motor premiums and low investment returns over the year. The operating profit of £92 million is up 14% year-on-year and we have grown our business by over 180,000 new policies during 2014. This result is partly driven by a particularly strong underwriting result of £51 million, which has benefited from prior year reserve releases amounting to £113 million (2013: £41 million). The combined ratio of 96.1% is the lowest ever reported and demonstrates disciplined management of underwriting, claims and costs.
‘Personal motor insurance remains our most significant business line, however in line with our objective to diversify our business we have seen good growth in other products, particularly home and SME. Home premium income increased by 17% to £182 million in the year and commercial premium grew by 13% to £227 million. In motor we prioritised achieving underwriting margins, rather than growing market share, and therefore saw a slight fall in overall motor premiums in 2014. We have seen signs that rates are moving up and we expect this to continue in 2015.’