INSURER LV= yesterday announced a hefty fall in its half-year operating profit, which it largely blamed on tough price competition in the UK motor insurance market.
The mutual – which is Britain’s third biggest car insurer and covers more than 3m drivers – saw its operating profit fall to £31.3m from £60.1m for the first six months of 2013.
General insurance income was flat, while sales at the group’s life insurance business dropped by 14 per cent.
“Our performance is reassuring given the backdrop of weakening motor rates, intense competition and low investment returns,” said LV= chief executive Mike Rogers, who has previously warned that the UK car insurance market may have cut prices too heavily over the last twelve months.
The organisation’s life insurance business suffered, which Rogers attributed to concentrating “on returns rather than market share”.
It is also thought that many men rushed to buy annuities before this year’s introduction of gender-neutral pricing, which inflated last year’s sales figures.
The Bournemouth-based company is targetting the over-45s market and aims to retain customers by offering high levels of customer service.