LV= has reported operating profits of £12m within its life division for the first six months of 2015, driven by a surge in demand for drawdown following the introduction of pension freedoms in April.
The insurer’s results for the first half of the year, published this morning, reveal year-on-year life sales measured on a present value of new business premiums basis increased 19 per cent, from £732m to £869m.
Pensions sales were up 45 per cent, from £277m to £402m, following a rise in demand for the firm’s income drawdown solution. Annuities sales, however, fell from £232m last year to £146m this year as the new flexibilities continue to dampen demand for guaranteed income retirement products.
Sales of the insurer’s flexible guarantee bond increased 136 per cent, from £59m to £139m, while equity release sales plummeted from £57m to £33m.
Protection sales rose 50 per cent year-on-year, from £96m to £144m, with the firm reporting improved figures across income protection, critical illness and term assurance. LV= says it plans to enter the business protection market later this year.
In the first six months of last year LV=’s life business recorded a £5m loss.
LV= group chief executive Mike Rogers says: “Our experience in offering ‘at retirement’ solutions meant that in the run up to the implementation of the new pensions rules we could focus on investing in further enhancing our proposition in order to help pension savers make the most of their funds.
“Earlier this year we became the first provider to create a fully regulated online advice service, LV= Retirement Wizard, which seeks to close the advice gap by making it easier for savers to access advice, and more cost effective for advisers to offer it, especially for those with smaller pots of money.”