UK-based insurance provider LV= said it is considering selling its life and pension business.
The statement, which was released on 15 June, followed media speculation about the firm engaging with advisers to put the remaining parts of the business up for sale.
In 2017, LV= shed its general insurance arm by entering into a joint venture with German insurer Allianz.
It is now considering any options available for the remaining divisions, and the best way forward for its 1.3 million clients.
No guarantees
“The board of Liverpool Victoria Financial Services Limited (LV=) notes the recent press speculation regarding a possible transaction in relation to its business,” the firm said.
“[The LV=] board is fully committed to maximising long term value for its members and is therefore assessing a wide range of strategic options following the disposal of the general insurance business to ensure that the remaining business continues to be operated in the best interests of all its members.
“Some but not all of these options may involve a transaction with a third party. No conclusions have yet been reached as to the most appropriate option to pursue, and there can be no certainty that this review will result in any transaction being agreed or with whom,” it added.
If the sale of the life and pension arm goes ahead, LV= would only offer car, home, travel, pet and landlord cover.
Industry contraction
There has been considerable consolidation of the pensions and life insurance industry in the past decade and the move by LV= potentially removes one more player from an already dwindling market.
The fallout from coronavirus and the financial impact it is having on companies is still to be quantified, but many are already talking about the expected contraction of most industries – not least financial services.
Fewer providers arguably means fewer products that advisers can offer to clients.
More products in the market would usually mean lower costs, so there is a risk that clients could end up paying more in future.
The sale is not guaranteed.
But LV= could also be the first of many companies looking to restructure, as covid-19 focuses the mind on future viability and profitability.
