LV=’s life business has reported a 23 per cent drop in underlying operating profit in the first half of 2013, from £14.5m in the same period last year to £11.1m this year, as post-RDR sales plummeted 14 per cent.
The insurance firm’s results for the six months to 30 June 2013, published this morning, reveal year-on-year IFRS pre-tax profit increased 145 per cent, from £36.1m in H1 2012 to £88.4m in H1 2013.
This figure was boosted by short-term investment fluctuations which added over £55m to half year profits. This is excluded from the underlying profit figure.
Sales within LV=’s life insurance division fell 14 per cent, from £86m to £74.3m.
Protection new business was down 9 per cent, from £16.1m to £14.7m, while overall retirement sales dropped 18 per cent, from £66.7m to £54.8m.
LV=’s retirement sales are divided into pensions, annuities and equity release. Pensions sales were up 27 per cent year-on-year, from £26.4m to £33.5m, but annuity sales fell 51 per cent, from £36m to £17.6m.
Equity release sales were also down 14 per cent, from £4.3m to £3.7m.
LV= chief executive Mike Rogers says: “We are pleased with the resilient results achieved in the first half of the year with pre-tax profit increasing despite the challenging competitive market.
“In life, new business sales and underlying operating profit were affected by the industry-wide impact of the retail distribution review and gender directive.
“In annuities sales fell in a competitive market in which we focused on returns rather than market share. Against this backdrop our sales were solid overall with strong growth in areas such as pensions, savings and investments.”