Before the year is out, it is likely that one of the country's largest mutually owned insurers will lose its mutual status. Formerly known as Liv
Before the year is out, it is likely that one of the country’s largest mutually owned insurers will lose its mutual status.
Formerly known as Liverpool Victoria, but now trading as LV=, the 177-year-old business will fall into the hands of American private equity group Bain Capital.
Although the insurer’s 1.3million members will ultimately determine whether the deal goes through, it is unlikely they will oppose it.
Kicked into touch: Thee 177-year-old business will fall into the hands of American private equity group Bain Capital
After all, they are likely to receive demutualisation windfalls and enhancements to the value of their policies if they accept the £530million offer from Bain Capital.
Yet the way LV=’s handsomely paid board has gone about lining up Bain Capital – and its approach to how the vote will be conducted – raises concerns.
First, it seems strange that LV=’s board, chaired by former Post Office boss Alan Cook (paid £261,000 in 2019), has decided to ignore a similar offer from Royal London.
Like LV=, Royal London is mutually owned and operates in the same life and pensions markets. So a deal would represent a merging of likes.
In contrast, Bain Capital has no experience in running a UK life and pensions business. Surely, it would be better for LV= to put both offers to the vote?
Second, the board of LV= is so keen to do a deal with Bain Capital that it is now seeking to lower the hurdles over which it must jump to get membership approval.
Under the mutual’s rules, more than 50 per cent of members must vote to approve any demutualisation. LV= wants to do away with this, presumably because it represents a massive obstacle.
Third, LV=’s board should be spelling out the personal rewards they will get from the Bain Capital deal.
A quick review of LV=’s 2019 accounts shows that boardroom largesse – supported by a mindboggling long-term incentive plan – is very much to the fore.
Members of LV= can watch Cook and chief executive Mark Hartigan answer questions about the deal at a ‘virtual’ event on February 3.
To ‘attend’ and put questions forward, email: [email protected] by midday on Friday. If I were an LV= member, I wouldn’t miss the opportunity.
It is fair to say that my life – like yours, no doubt – has changed dramatically since last March. Hunkering down has been the order of the day.
So, no more live football although that’s not a bad thing since my team West Bromwich Albion is currently staring at relegation from the Premiership – playing a style of soccer that makes watching paint dry a more pleasurable experience.
Also axed are my visits to the cinema and music venues. Small sacrifices given the horror of this pandemic, but I crave for a semblance of normality to return. Over the last nine months, I’ve sought comfort instead in BBC’s iPlayer although I’ve stopped listening to BBC Radio 4’s Today programme on the grounds of its endless negativity.
One TV show that I fully immersed myself in was ‘crime’ drama Death In Paradise – nine series were absorbed late at night in a matter of weeks during spring last year. Yes, it’s all rather formulaic, but light relief from the grim world outside.
Last week, series ten started with hypochondriac Detective Neville Parker solving yet another case on the idyllic but crime-ridden Caribbean island of Saint Marie – despite all kinds of obstacles put in his way (his humble home burning down and a cat allergy that prevented him from going anywhere near the police station).
As I sat watching ‘our’ man in Saint Marie against a backdrop of beautiful people, beaches and seas, I felt temporarily transported from the horrors of coronavirus. I also contemplated the fact that if someone had asked me last spring whether we would be in lockdown when series ten started, I would have laughed them out of court. How depressing and sapping.
So, stay safe dear readers and keep saving and investing if you can. Hopefully, by the time series 11 of Death In Paradise comes around next year, normality will have triumphed over lockdown and some of us will be spending a little (not all) of the money we saved in the pandemic.