LV= ’s life and pensions managing director switched from the banking sector with the aim of creating a household name in insurance.
I was in the university career offices and intended to fill out the application for British Gas Exploration overseas,” says LV= life and pensions managing director Richard Rowney. “The Barclays one was in the same slot so I just filled it out for a bit of practice. I ended up spending 15 years there.”
After setting up a corporate banking unit in Leeds, integrating Barclays and Woolwich and doing what Rowney describes as “looking at the problem children and making tough decisions”, he decided to leave the company. “I wanted to experience the insurance side of things rather than banking. LV= had real strengths in that it was well capitalised and was mutual at that time.
“My colleagues at Barclays raised their eyebrows and said, ’You’re going to a brand nobody has heard of, have you really gone to retire to this sleepy little mutual on the south coast?’ But I saw the appeal of taking an organisation that had no clear strategic direction and was not punching above its weight as an opportunity to do something different. I wanted to create a household insurance name from nowhere, ” says Rowney.
After three years as LV=’s group chief operating officer, which saw Rowney develop the company’s strategy, brand and IT system, he is now life and pensions director of a company whose profits more than doubled last year. “The LV= board took an educated gamble in appointing me. I am not an actuary but I am passionate about the subject matter and I think there is an opportunity to make LV= a challenger brand in life and pensions as it is in general insurance.”
LV=’s annual results, published last week, indicate Rowney seems to be succeeding in his mission. The company’s retirement business saw its sales grow by 35 per cent and its pensions, annuities and protection profits more than doubled. But it does not stop there for Rowney. “My vision is to make LV= a retirement specialist. It would be hard to go head to head with L&G or Aviva but we think there is a big enough niche - about 5 to 10 per cent of the market - where specialism is required.”
Rowney believes LV= can achieve this goal. “We have talented people who understand the legislation. We love legislative changes because we can act quickly. There is not all the red tape that bigger firms have so we can make decisions within 24 hours. Big companies have so much governance to go through that by the time they implement something, the opportunity is missed.”
Bringing products to market quickly is something LV= has been in the headlines recently as being one of the first providers to commit to be offering capped and flexible drawdown from this month. “The decision on this one came late from the Government. But we think, for the end-consumer, it is right to have something. If you are going to keep driving growth in an industry that is fairly flat, you have to do something different.”
“I see capped and flexible drawdown as part of an overall retirement portfolio. We want to give advisers as many solutions as possible.” Rowney prides himself on LV=’s relationship with advisers and its provision of technical support. “Advisers are absolutely crucial to us. Between 92 and 95 per cent of our business comes from them, so making sure we help them write profitable long-term business is top priority.”
However, when the retail distribution review comes in, Rowney believes LV=’s focus will shift slightly. “The law of unintended consequences means the RDR will drive more people to be unadvised, so we will look for opportunities to serve those people not being served by advisers. We already have a relationship with nearly three million customers and a reputation for being easy to work with will help us in that marketplace. I feel comfortable that advised and direct can work together to benefit the end consumer. It is just a question of raising awareness of our proposition and of protection in general.”
Rowney feels generating awareness is a challenge for the protection industry. “Life and protection is not the most exciting thing for the consumer to get out of bed for. “I find it bizarre that people spend more time insuring their cars, phones and pets than themselves. I admired the Aviva campaign for doing something different and I think the ABI is doing a good job but my sense is that industrywide initiatives sometimes fall down because of bureaucracy. I would be supportive of these sorts of initiatives but I do not see them as silver bullets.
“A lot of competitors talk about tough markets and I get a bit bored of that. There are things we all get frustrated by but we should be used to that by now.”
Rowney believes the industry should be working more closely with the Government to raise awareness of protection in the face of reduced state provision. “I sense a mutual desire for providers and the Government to work together. The Government has got a clear agenda in reducing the deficit and the industry has a part to play in developing those propositions.
“Getting individuals to take increased responsibility is a laudable statement but whether people have the financial capability to do this is another matter.”
That is not the only challenge that Rowney sees facing the industry this year. “How regulation such as the RDR, Solvency II and the latest madness, the gender directive, end up playing out in terms of portfolios will be key. There will be winners and losers but these decisions have been made and we have to figure out the best way to approach them.”
Born: Bournemouth, 1970
Lives: Bournemouth but with a 20-year gap before coming back to the south coast
Education: Geography degree at Leeds University, MBA from Henley, GMP from Harvard
Career: 2010-present: MD of life and pensions, LV=; 2007-10: group chief operating officer, LV=; 2005-07: integration director, Barclays; 2003-05: CEO, Barclays Premier Banking; 2001-03: risk director, Barclays Small Business; 2001: programme director, Barclays UK Banking; 1999-2001: assistant director, Barclays Corporate Banking; 1996-99: relation-ship manager, Barclays Business Banking; 1994-96: manager, Barclays Business Support and Recoveries; 1992-94: Barclays graduate development scheme
Likes: Playing tennis, gadgets, eating out with friends
Dislikes: Unnecessary meetings, queues, bad service
Drives: BMW M3
Book: Anything by Dan Brown
Film: The Social Network
Album: Only by the Night - Kings of Leon
Career ambition: To build a new brand within financial services with a lasting legacy
Life ambition: Creating happy memories
If I wasn’t doing this I would be…A chef in my own restaurant or having a mid-life crisis challenge, such as sailing across the Indian Ocean