(Alliance News) - Insurer Liverpool Victoria Financial Services Ltd on Friday said its profit and market share grew in 2020 and it is now roughly a year away from being acquired by private equity firm Bain Capital Credit.
Total income, including premiums earned and investment income, fell 22% in 2020 to GBP1.41 billion from GBP1.80 billion.
Pretax profit more than doubled to GBP37 million from GBP15 million, however. Benefits, claims and expenses, though excluding a mutual exit bonus, fell 23% to GBP1.37 billion from GBP1.78 billion.
LV agreed to sell its remaining 30% stake in LV= General Insurance to Allianz SE back in May 2019.
"The sale of the general insurance business in 2019 represented a good return on the investment members made into its growth, with the resultant sale proceeds enabling a surplus to be returned to with-profits members," the company said.
"This surplus will be distributed through on-going mutual bonuses and a special exit bonus introduced in 2020. This has already allowed us to share GBP45 million of exit bonus with eligible members during the year."
LV said it increased its market share for the first time since 2016.
Chief Executive Mark Hartigan said: "Despite the unprecedented challenges presented by the pandemic, LV= has delivered a good financial performance in 2020.
"I am particularly pleased that we increased market share in both Savings & Retirement and Protection. By taking quick and positive actions in response to Covid-19, as well as delivery of planned change initiatives, we continue to improve service for customers and have strengthened the propositions we offer the market."
The company's capital coverage ratio, however, slipped to 198%, from 244% at the end of 2019.
LV back in October said it was in "exclusive discussions" regarding a potential transaction involving US investment company Bain Capital.
LV said on Friday: "After careful consideration the board was unanimous in its decision to pursue a transaction with Bain Capital. While this proposal means LV= will no longer be a mutual, LV='s culture, heritage and values will live on."
The deal is set to close in March of next year.
By Eric Cunha; ericcunha@alliancenews.com
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