Changes to CI contract also announced
There is “no reason” why LV= cannot increase its share of the protection market to as much as 8% in the short-to-medium term, according to the provider’s managing director for life & pensions.
Speaking to Health Insurance today following publication of sales figures for 2011, Richard Rowney (pictured) said that LV= could grow its market share from its current 4-5% to “six, seven or eight per cent” in the next two-to-three years.
Rowney said that while he believes LV= is currently thought of as “the main player” in income protection (IP), it does not want to be seen “just as an IP provider”.
LV= saw annual premium equivalent for CI increase by 52% in 2011 to £6.1m, up from £4m in 2010. APE for IP also rose, up 34% in the year, to stand at £5.8m, up from £4.3m. Overall protection business was up 18% with APE of £28m, up from £23.7m in 2010.
However, LV= failed to hit the targets it had set for sales of its Mortgage & Lifestyle Protection (MLP) product, although Iain Clark, the provider’s managing director for protection, said that “in an overall sense” when set alongside its IP product, it did beat forecasts. Clark added that the provider would continue to look to raise awareness and understanding of the product among advisers.
Rowney said that while other protection providers “wavered” in the face of challenges around capital, LV= invested heavily in service provision and preparations for “significant” regulatory changes affecting the market as a whole. The provider’s life & pensions business created 125 new jobs in 2011 and invested in its service capabilities in Exeter.
At the same time, however, LV= managed to achieve a trading profit of £33.7m, up 20% from £28m in 2010.
Rowney and Clark said that while other providers in the market looked to achieve profitability through “cost-cutting”, LV= remained committed to “heavy” investment in underwriting and service capabilities.
The provider also announced changes to it CI product today, with an increase in the number of conditions and partial payments covered.
LV= now offers cover on 48 conditions, up from 38, and has increased the number of so-called "ABI+" definitions it offers by seven, taking the total to 16.
LV= said its CI cover now also offers seven partial payments, up from two previously, while the number of illnesses policyholders' children are covered for has also been increase to match the adult conditions, excluding total permanent disability.
Finally, if a child is covered under more than one parent's policy the amount that LV= will pay out in total has doubled from £25,000 to £50,000.