Closure of whole of life offering has seen shift towards term assurance, but income protection offers growth opportunity
LV='s new protection business witnessed a 15% year-on-year decline - from £178m to £152m - during the first half 2018.
According to the insurer, this was due to the closure of its whole of life offering and mortgage and lifestyle protection policy to "improve sustainability".
"This is reflected in an overall 15% fall in sales to £152 million (HY 2017: £178 million), with the mix of business also shifting towards term assurance," the firm said.
However individual income protection "remains an attractive market and following management action, including a range of pricing changes, we expect to see growth in the second half of the year", it added.
New business contribution in life division reduced to £14m from £20m, while retirement is up to £12m and protection down to £2m. "The reduction in protection is due to a combination of £4m from the exit from the higher margin but capital intensive 50+ product and £3m from a change to the business mix which saw an increased proportion of sales of lower margin term-life assurance," said LV=
For life and group, LV= delivered an increased operating profit of £19 million (HY 2017: £7 million), however new business sales are down 5% at £983 million (HY 2017: £1,035 million). This reflects "the withdrawal from capital intensive product lines in protection and a reduction in pensions sales which was expected following the high levels of defined benefit to defined contribution transfers in 2017," said Richard Rowney, LV='s group chief executive.
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