The £530m deal which will see Bain take control of LV= Life business, announced late 2020 is reaching the end of the regulatory process. Despite some opposition from MPs and members of LV= who prefer the mutual business model, the 1.3m members of what was once known as Liverpool Victoria, will receive a small payment as part of the deal. Exact details remain a mystery, but IE guesstimates that this will probably be under 500 pounds for most savers. This windfall payment is small, but is way more than the pitiful interest rates being offered on say 5K of cash savings by every UK bank, building society or ISA scheme right now.
The majority of LV= Life customers however may have to wait for the cash, as it will be added in the form of an enhanced bonus on with-profits Life policies and these typically have a 10-30 year lifespan. So you get the extra payment when the policy matures, and as inflation looks set to rise to 5-7% per annum that could mean your bonus isn’t worth much in the 2030s/40s.
Following the news that Bain is set to take over the life and pensions business from UK insurance firm LV= Ben Carey-Evans, Insurance Analyst at GlobalData, offers his view:
“Bain’s purchase will immediately make it a leading player in the UK life insurance market. GlobalData’s 2020 UK Life and Pensions Insurance survey shows that the LV= brand was an influential player in key life markets. LV= held a 5.1% share of the total whole of life assurance market in 2020, which made it the sixth largest player in the UK for that market.
“This will provide Bain with a strong presence in a key life insurance market in the UK as soon as the takeover is completed.
“LV=’s sale follows selling off its general insurance arm to Allianz at the start of 2020.”
THE FUTURE IS WOKE
The modern obsession with identity and woke politics will probably transform the stale Life market over the 2020s. Younger consumers are more concerned with their image on social media, than who gets to pay for their funeral, or whether their family receives a payment after death. That offers a golden opportunity for insurers who offer tick-box options on charity donations on top of premiums, activist branded products or partnerships and features like Your Legacy apps, where policyholders can customise exactly which causes can benefit from their bequest.
More importantly, the policyholder needs to be able to cancel that cause at the drop of a Tweet, should a social media pile-on suddenly render that choice a bad move. You really need to understand the complexities of online spats and virtue signalling Top Trumps to motivate younger consumers into buying Life products.