Poor performance in its general insurance business has seen LV=’s pre-tax profits plummet in the first six months of the year despite strong sales from its life arms.
Pre-tax profits were down 97 per cent to £1m from £49m a year earlier.
Group operating profit fell to £33m for the first half of the year, compared to £79m in the same period in 2015.
Richard Rowney, who took over as chief executive at the life company in June, attributed the drop to lower profits in the general insurance business and a £19m loss in the group’s Heritage business driven by “claims experience variances”.
However the group’s life and pension arms showed strong performance, with sales just breaching the £1bn mark in the six months to the end of June, up from £864m in the same period last year.
Operating profit in the life and pension business for the period was £28m, up 133 per cent from £12m a year earlier.
The company stated it has experienced continued strong growth in its Retirement Solutions business, with total new business premiums exceeding £860m in H1 2016, up 20 per cent on H1 2015.
It reported a 10 per cent increase in pensions where it stated demand for drawdown continues to increase following the 2015 pension freedoms, and a 39 per cent increase in sales of LV=’s flexible guarantee products.
According to the first half results, demand for LV=’s specialist annuity products remains strong with sales of fixed term annuities up 42% per cent.
In protection new business sales are up slightly at £146m from £144m.
Commenting on the outlook, Mr Rowney said: “We remain the UK’s most recommended insurer according to YouGov and earlier this year we were voted the most trusted by Moneywise.
“I believe that we can build on these strong foundations and I increasingly expect LV= to become the challenger brand in this industry, one that is famous for great customer service combined with clever investment in digital solutions that benefit our customers, members, IFAs and brokers alike.”
