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City comment: LV deal is about more than just money — it’s about a way of life

·1-min read
The £530 million sale of LV= to US firm Bain Capital was the ‘best financial outcome’ for members, it chief executive said (/PA) (PA Archive)
The £530 million sale of LV= to US firm Bain Capital was the ‘best financial outcome’ for members, it chief executive said (/PA) (PA Archive)

It’s not just about money: the battle over LV’s future is a battle over a way of life.

For many mutual members, the £100 payout offered by Bain sticks in the craw not just because it is a modest sum but because it seems far too little to compensate for the loss of mutual status.

Mutual insurers are a British innovation that stretch back hundreds of years. Liverpool Victoria, as LV originally was, began life in 1843 as a burial society for the poor. People could buy policies to cover funeral costs for as little as a penny a week.

The mutual industry and its members are imbued with a spirit of resilient, community, and pride. A sale to a faceless Wall Street entity like Bain Capital is the antithesis of what many believe an organisation like LV should stand for.

The problem is the idea is on the way out. The majority of LV’s with-profit members, those who own and control the business, are over 70. New members are not replacing those who sadly see their policies mature at the same rate.

LV expects the proportion of with-profit members among its ranks to fall from 23% to just 8% of policyholders over the next decade. That would put huge stress on the remaining members to pay for the investment needed to keep the business going — investment many members will not live to see the benefits of.

LV boss Mark Hartigan wants to save the brand and business while giving policy holders a fair payout now. But for many, money means less than preserving a heritage and idea.

It’s a tough sell.

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