LV announced last week (May 31) that it has sold its GI business to German insurer Allianz, while L&G has done the same.
Aviva is also considering a split of its pension and life arm from its other insurance business.
LV sold its remaining 30.1 per cent stake for £365m, completing a process that started in December 2017 and saw the insurer pocket a total £1.078bn to invest in its pensions and life insurance business.
A spokesperson for LV told FTAdviser: "We had grown the GI business to in excess of £1bn at which point it made sense to realise some of the value.
"We ran the GI partnership with Allianz while the priorities of the two businesses were aligned. However, more recently it has become clear that Allianz want to continue investing in GI in the UK.
"We want to use our capital to grow life and pensions so it made sense for us to complete the sale of the GI business to enable us to focus on growing this area of the business."
The mutual insurer stated pensions was its heritage and there were good growth opportunities in this area.
LV is also planning to convert from a friendly society to a company limited by guarantee, with members voting in favour of these proposals last week. This would enable it to become more competitive in the market, it stated.
Meanwhile, L&G sold its GI business to Allianz for £242m, and much like LV it stated reinvestment in core areas was a reason for moving away from this market. These include life insurance & pensions, annuities and investment management.
John Godfrey, group corporate affairs director at L&G, said: "GI was a small-ish business for us, on average less than 2-3 per cent of our profit and loss, and it was not part of our strategy to grow to market-leading scale under our ownership. It now has a great opportunity to do that with Allianz."
He added: "GI or household insurance is very different to life & pensions so synergies and cross-selling opportunities are small, and a sort of life-GI barbell doesn’t make sense, at least to us.
"But redeploying proceeds from this sale into the core activities that we already do really well enables us to deliver the best results for customers and shareholders."
Last week it was revealed that Aviva is preparing to unveil a big shake-up of its UK business and is expected to split out its GI business.
Observers said one option was to split Aviva’s UK business into two parts. One would contain the life insurance division, the other would be non-life insurance, such as home and car cover.
Aviva did not want to comment on its plans but it is believed splitting the business will allow the insurer to focus more closely on the fundamentals of each division.
But is not only insurers that are turning their backs on GI, advisers are seen to be doing the same.
Tim Morris, financial adviser at Russell & Co, said: "General insurance is not profitable for us and therefore we focus on our core business. This includes advising on personal and business cover, such as life assurance and income protection.
"If we have a business requiring GI, such as public liability or professional indemnity, we refer them to a broker.
"If they were to subsequently look at home or motor insurance, I doubt they would use a life company such as L&G or LV anyway. I don’t think they were very competitive."
Alan Chan, director of IFS Wealth and Pensions, welcomed life insurers' move away from GI, saying it could have a positive effect overall.
He said: "The days of IFAs doing GI for clients are long gone [...] These products are commercialised now, in a very competitive market, and can often be found cheaper online either direct with the insurers or via comparison websites.
"I see this trend as a good one because it means that these insurers can now dedicate more resources to their core businesses, such as protection insurance and pensions, which would be better service overall for clients and IFAs alike."
LV told FTAdviser that by moving away from GI the attention of the board will now solely be on life and pensions which was good news for advisers.
LV stated: "This move is good news for IFAs as it means that they will get more help and attention from us."
amy.austin@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
