AFM CEO comments on the deal offered to LV= members from its sale to Bain Capital
Thursday 4 November, 2021
If members feel aggrieved that the sale to Bain Capital for £530 million means that only £111 million will be paid to members in 2022 in return for their vote, with a 0.1% top up to with-profits policies for each year it was held, then that’s something they may have to get used to. Read more
In fact, the one-off payment, of either £60 or £100 is low compared to previous demutualisations and the 0.1% policy enhancement is no more than the annual ‘mutual bonus’ that LV has paid its members in recent years.
Historically, demutualisation means managers focus less on customer service and policyholder returns, so the value of any payment may soon be lost.
The sad fact, for a small mutual seeking to discover its future direction, is that the amount of money it has spent on dressing itself up for sale has been colossal, the money earned for selling its general insurance business has been lost, and members are being asked to sell their rights in the business for less than the cost of a good meal out.