Life insurer LV in takeover talks


Mutually owned life insurer LV will on Monday verify that it’s in talks over a takeover. Any deal may result in a windfall payout for its 1.1m members.

LV, which is the third-largest insurance coverage mutual within the UK, launched a strategic overview in June after promoting its normal insurance coverage enterprise to Germany’s Allianz. It stated on the time {that a} cope with a 3rd social gathering was one of many choices on the desk.

The corporate is anticipated to substantiate on Monday that it’s in talks with “a variety of events”, in keeping with folks accustomed to the negotiations, though there isn’t any certainty that the negotiations will result in a deal.

Sky Information reported that potential consumers of LV, which could possibly be value greater than £500m, embrace Royal London, the UK’s largest mutually owned insurer, and personal fairness agency Bain Capital.

Royal London and Bain declined to remark.

LV, which was based in Liverpool in 1843, was till final yr one of many UK’s final remaining composite insurers, promoting each life insurance coverage and normal insurance coverage. Nonetheless, it offered its normal insurance coverage enterprise, which gives cowl for automobiles and houses, to Allianz in two levels in 2017 and 2019 for a complete of £1.3bn.

That left the remainder of LV as a a lot smaller enterprise and prompted the strategic overview from Mark Hartigan, who turned chief government firstly of this yr.

In 2019, LV made a pre-tax revenue of £15m on whole revenue of £1.8bn. Virtually all the firm’s 1.3m prospects are members, that means that they’ve the best to vote on what occurs to the corporate and could possibly be in line for a payout within the occasion of a sale.

Final yr, LV modified its authorized standing from being a pleasant society to a mutual in a transfer that legal professionals stated would make it simpler to promote the corporate or mix it with one other insurer.

Royal London, in the meantime, has been bulking up underneath Barry O’Dwyer, a former Prudential and Normal Life government who turned chief government final yr. Earlier this yr it agreed a deal to purchase Police Mutual, which specialises in insurance coverage for the police and armed forces.

Non-public fairness funds have taken a rising curiosity in life insurance coverage corporations over the previous few years. Though the sector is closely regulated and capital intensive, non-public fairness homes see scope to chop prices and to speculate extra aggressively in an effort to bump up returns.

Extra reporting by Stephen Morris


Please enter your comment!
Please enter your name here