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LV= mulls tie-up with Royal London to create 'mutual' powerhouse

Alan Tovey
·2-min read
V=County Championship - Division One - Warwickshire v Nottinghamshire 
V=County Championship - Division One - Warwickshire v Nottinghamshire

Life insurer Liverpool Victoria, known as LV=, is in talks to merge with rival Royal London to create a new “mutual” financial services powerhouse.

LV=, which is owned by its customers, launched a strategic review at the end of the last year as it sold its general insurance business to Allianz for £1.1bn to focus on pension and life insurance operations. One of the options under consideration has been tie-up with a competitor to gain heft.

Royal London, which is also a mutual, is now understood to be in talks with LV= about a deal that would combine their pensions, life insurance and asset management arms to create a business with about 10m customers. It would value LV at between £500m and £1bn, acccording to Sky News.

The board of LV= is understood to have met last week to discuss the progress of the review, with the potential for an agreement with Royal London possible within weeks.

LV=, which was set up in 1843 to help poor Liverpudlians pay for funerals, expanded vastly over its life and now manages about £14bn of assets.

However, it is dwarfed by Royal London, which was founded in 1861 and has grown to be the country’s largest mutual life, pensions and investment business. It manages £139bn of assets, and with 4,300 staff, has three times the headcount.

A tie-up is by no means certain, though, with sources saying that LV=’s review could see it decide to remain independent.

According to reports, Royal London is not the only option LV= has, with esure, the insurer backed by Bain Capital, also said to be in the running for a tie-up.

LV= and Bain Capital declined to comment. Royal London did not respond to requests for comment.