Liverpool Victoria

Liverpool Victoria
Friendly society
Industry Financial services
Founded 1843
Headquarters Westbourne area of Bournemouth, United Kingdom
Products Insurance, savings, equity release
Website lv.com

Liverpool Victoria (which since May 2007 has traded as LV=) is one of the United Kingdom's largest insurance companies with over five million customers. It offers a range of products from car, home, pet, travel and life insurance to investment and retirement solutions. LV= is also the United Kingdom's largest friendly society, with 5,700 employees.

Mission

Liverpool Victoria Friendly Society Limited was founded in 1843 as a burial society, and for many decades Liverpool Victoria was most commonly associated with "penny policies" collected door to door by a cross country team of agents to provide a method of saving to people of modest means. Today LV= expresses its mission as enabling people to "look after what they love" by the provision of insurance, investment and retirement solutions.[1]

Mutuality

It is incorporated under the provisions of the Friendly Societies Act 1992 and has its registered address, and head office, at County Gates, Westbourne, Bournemouth BH1 2NF. It is regulated by the Financial Conduct Authority and the Bank of England Prudential Regulation Authority.[2]

As a mutual society, LV= has no shareholders and is owned by its members, who are all the policyholders of Liverpool Victoria Friendly Society Limited; holders of policies issued by subsidiary companies, for example car insurance, are not members.[3]

Bondholders

Although LV= has no shareholders, it now has external bondholders following the issue in May 2013 of £350 million of subordinated debt. This debt, which carries interest at 6.5%, is due for repayment in 2043, although LV= has the option to repay it from 2023. The debt counts as lower tier 2 capital and is expected to be eligible as capital under the Solvency 2 capital regime which will apply to all EU insurance companies from 1 January 2016.[4]

Business activities

Today LV= is a diversified financial services group, employing 5,700 people and serving over five million customers.

LV= offers services directly to consumers, as well as through IFAs and insurance brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and some trades unions.

At the start of 2015 LV= was ranked as the best insurance business in the UK for customer satisfaction and seventh best across all UK businesses, with only one other insurer in the Top 50.[5]

General insurance

General insurance products covering motor, home, pet, travel and small business insurance are provided by Liverpool Victoria Insurance Company Limited. Some products are sold both directly to the public over the telephone and internet and, under the ABC Insurance and Highway brands, through insurance brokers. This latter distribution channel (known collectively as LV= Broker) was boosted in October 2008 by the £150 million acquisition of Highway Insurance Group PLC, following a successful public offering for its shares.[6][7] Since 2007 the general insurance division has also owned Britannia Rescue, the UK's fourth largest road rescue business, which in 2009 won a contract to be the exclusive provider of road rescue services to the customers of Asda.[8] General insurance products are also sold through white label partnership arrangements including Nationwide Building Society,[9][10] and CSMA Club, the latter arrangement dating back to 1923.[11]

The general insurance business of LV= has its origins in the acquisition in 1996 of Frizzell, a business founded in 1923, which acted as a broker of motor and household insurance policies.[12] A new subsidiary company, Liverpool Victoria Insurance Company Limited, was established in 1996 in order to underwrite the Frizzell business, which was augmented in 1997 by the acquisition of the motor and household polices of Landmark Insurance.[13] In 2006 it then acquired ABC Insurance, a start-up insurance company established by John O'Roarke, formerly the managing director of Churchill Insurance and a senior executive of Direct Line, together with other former Direct Line executives, with a view to delivering substantial growth and an increase in public profile to a business that was then in steady decline, reliant on direct mail for marketing and with unsophisticated underwriting.[14][15] This was achieved. By the end of 2012 the £386 million of premium income and 1.1 million customers of 2006 had increased to £1.5 billion of premium income and over 4 million customers with profits of £117 million. The business had become the UK's third biggest motor insurer with an 11% market share.[16] The transformation of the business was acknowledged by receiving the accolade of General Insurer of the Year at the 2012 British Insurance awards.[17]

In May 2015 three people were arrested after LV= reported to the police its suspicion that between January and December 2014 an employee had passed on confidential information regarding third party road traffic collision victims to a claims management company in exchange for £17,000. The three individuals have been bailed and the case is ongoing.

Life assurance

Life assurance products covering with-profits assurance, term assurance, whole life insurance, annuities and equity release mortgages are provided by Liverpool Victoria Friendly Society Limited and Liverpool Victoria Life Company Limited. Since January 2008 the product range has been augmented by flexible retirement solutions and equity release schemes through the acquisition from Swiss Re of the former G E Life businesses in the United Kingdom.[18]

In 1999 Liverpool Victoria was heavily criticised in a report by the Personal Investment Authority for "serious and widespread compliance failings" including hiring inept staff who offered customers poor financial advice.[19] The Society was fined £900,000, the largest fine ever handed out by the PIA at the time.

Liverpool Victoria Life Company Limited, then known as Permanent Insurance, was purchased from Equitable Life for £150 million in 2001.[20]

It was announced in December 2014 that Liverpool Victoria would be acquiring the business of Teachers Assurance, subject to the approval of the latter's members.[21]

Investments

In August 2011 it was announced that the fund management services and OEICS provided by Liverpool Victoria Asset Management Limited and Liverpool Victoria Portfolio Managers Limited would be transferred to Threadneedle Asset Management as LV= had failed to achieve sufficient scale, despite having some £8 billion of funds under management.[22]

Banking

Liverpool Victoria Banking Services Limited, which came into the LV= group as part of the 1996 Frizzell acquisition, provided loans and credit cards until 2007 when the business was closed following heavy losses.[23] In 2008 the company was fined £840,000 by the FSA in connection with its past sale of payment protection insurance alongside loans.[24]

Offices

Victoria House from Southampton Row

While the head office is in Westbourne, Bournemouth, LV= has significant branch offices in Croydon, Brentwood, The City of London, Hitchin, Bristol, Leeds, Huddersfield, Ipswich and Exeter.

Victoria House in Bloomsbury Square, London, was built for Liverpool Victoria in the 1920s and remained its head office until the relocation to Bournemouth at the end of the 1990s.

Brand and image

Following the appointment of Mike Rogers as the new Chief Executive in 2006, LV= has undergone significant change in an effort to modernise its image and to re-invent itself[25] in the face of the gradual industry-wide decline in with-profits assurance. [26][27] On 25 July 2016 Richard Rowney replaced Mike Rogers as CEO.

LV= and LV.com

In early 2007 the name Liverpool Victoria was dropped (although it remains the formal name of most legal entities within the group) in favour of LV=.[28] A distinctive green heart icon stylized from the letter 'V' has also become a symbol of the group in its advertising, playing on the visual similarity of LV= to the word LOVE. Shortly after the rebranding LV= acquired the internet domain name LV.com, which the French luxury goods manufacturer Louis Vuitton had in November 2006 failed to acquire through a WIPO law suit.

Sponsorship

In recent years the society has promoted itself through sponsorship of sport. As Liverpool Victoria, it sponsored the UK Snooker Championship from 1997–2000.[29] It has sponsored the cricket County Championship since 2002, initially (2002–2005) as Frizzell[30] (the name of an old established insurance business acquired in 1996),[31] in 2006 as Liverpool Victoria and since 2007 as LV=.[32] In rugby union, LV= signed a three-year sponsorship deal with Premiership club Harlequins in October 2008,[33] and in October 2009 signed a two-year deal to become title sponsor of the Anglo-Welsh Cup.[34]

Television

In 2007, for the first time in the society's history, television advertising was employed for car insurance and life assurance, the former featuring the song Have Love, Will Travel,[35] and the latter featuring Cilla Black.[36]

References

  1. ↑ Group Chief Executive's Statement LV 2008 Report and Accounts
  2. ↑ LV entry on PRA Register Accessed 27 March 2014
  3. ↑ LV website membership section Accessed 30 March 2014
  4. ↑ LV= prices £350 million of subordinated debt Actuarial Post accessed 13 April 2014
  5. ↑ LV top insurer for customer satisfaction Cover magazine, 20 January 2015, accessed 31 May 2015
  6. ↑ Highway Insurance agrees 150 million pound takeover Reuters, 28 August 2008
  7. ↑ Highway Insurance Group PLC: Offer by Liverpool Victoria Insurance Company Limited declared Wholly Unconditional, 9 October 2008
  8. ↑ Britannia Rescue lands contract to supply to Leeds-based Asda The Huddersfield Daily Examiner, 12 March 2009
  9. ↑ Nationwide and LV team up Only Insurance.com, 2 June 2008
  10. ↑ Nationwide expands insurance offering with LV Insurance Daily, 2 December 2008
  11. ↑ csma Club website
  12. ↑ Liverpool Victoria to buy Frizzell The Independent 8 February 1996 accessed 25 March 2014
  13. ↑ Standard & Poors analysis of Liverpool Victoria General Insurance Group 01 Nov 2011 accessed 6 April 2014
  14. ↑ Churchill team links up with Liverpool Victoria Acquisitions Monthly October 2006 Accessed 25 March 2014
  15. ↑ Interview: John O'Roarke - Back in the fast lane Post Magazine 29 March 2007, Accessed 30 March 2014
  16. ↑ LV 2012 Report and Accounts, pages 11, 18-19 Accessed 27 March 2014
  17. ↑ British Insurance Awards 2012 Winners and Finalists accessed 3 May 2014
  18. ↑ LV= 2007 Report and Accounts p9
  19. ↑ Liverpool Victoria fined £0.9m BBC News, Business, Your Money, 27 January 1999
  20. ↑ Equitable Life raises £150m with fire sale of Permanent.
  21. ↑ Teachers Aassurance proposes to transfer business to Liverpool Victoria Accessed 15 May 2015
  22. ↑ Threadneedle formally acquires LV= funds business efinancialnews.com 16 August 2011 accessed 18 October 2011
  23. ↑ LV 2007 Report and Accounts p16
  24. ↑ FSA Register
  25. ↑ Sum of all changes for Liv Vic overhaul is LV= Financial Adviser, March 2007
  26. ↑ With Profits: Down But Not Out IFA Online, April 2006
  27. ↑ With-profits industry in "terminal decline", BBC News 20 August 2003
  28. ↑ Liverpool Victoria blows £2m to become LV=, The Register, 22 March 2007
  29. ↑ Tournament Histories – The UK Championship Global Snooker Centre
  30. ↑ Liverpool Victoria sponsor Championship ECB Press Release 14 September 2005
  31. ↑ Liverpool Victoria to buy Frizzell, The Independent, 8 February 1996
  32. ↑ ECB Website
  33. ↑ LV= kick off Harlequins sponsorship PRLog 23 October 2008
  34. ↑ "LV= sponsors rugby's Anglo-Welsh Tournament" (Press release). Rugby Football Union. 29 October 2009. Retrieved 30 October 2009.
  35. ↑ LV= Car insurance advertisement Youtube.com
  36. ↑ LV= 50 Plus advertisement Youtube.com
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