LV cuts helped improve GI underwriting result
LV has shed almost 400 jobs group-wide over the past 12 months as it aims to cut costs by more than £40m by next year.
The insurer said in its first-half 2017 results this morning that the number of full-time employees had fallen by 384 compared with last year’s first half, accounting for around 6% of the total workforce across the group.
The cuts mainly came from not replacing departing staff. LV has achieved £12m of its targeted £40m savings in the first half of 2017.
Speaking to Insurance Times earlier today about the results LV general insurance (GI) managing director Steve Treloar did not say say how many of the LV cuts had fallen on the GI side of the business, but he said that staff reductions had in part contributed to the division’s improved underwriting performance.
The GI unit’s combined operating ratio improved by 4.9 percentage points to 93.6%, and Treloar said that 2.9 points of this improvement was down to lower costs, which he said were “people and general operating costs”. The other 2 points came from better claims experience, mainly in motor.
He added: “We are keen as a management team to ensure we only recruit people when we definitely need them so rather than replacing roles we have been leaving those roles vacant. That gives us a much better and more appropriate cost base going forward so that we can compete in what remains the world’s most competitive insurance market.”
An LV= spokeswoman told Insurance Times that the £40m cost target was not solely about reducing headcount but also about achieving other efficiencies across the group, such as avoiding duplication of work and improving systems.
Operating profit in LV’s general insurance business more than doubled in the first half of 2017 to £49m, while at group level profit increased by 58% to £82m.