Liverpool Victoria has had “initial, exploratory discussions” with rival insurer Royal London on a possible deal between the two firms, following the failed acquisition of LV by a US private equity firm.
The talks, confirmed today (February 7) by both insurers, suggest “no certainty” of a deal yet, and a further announcement is yet to be made.
"We share a common interest with Royal London in a healthy and vibrant mutual sector so that we can both compete fairly with shareholder-owned firms,” said Seamus Creedon, LV’s incoming interim chairman.
“We have had, and continue to have, discussions with Royal London about if and how we can cooperate to the benefit of both sets of members and the mutual sector.
“In the meantime, we will continue to strengthen our independent business for the benefit of our existing and future policyholders."
The renewed talks happened just months after LV’s outgoing chairman Alan Cook accused Royal London of trying to “destabilise” its deal to be acquired by Bain Capital.
Cook announced his departure at the end of last year, following a member vote on December 10 which did not meet the threshold the insurer needed to push through its proposed acquisition by Bain Capital or undergo demutualisation.
He had argued the insurer was “a sub-scale, life and pensions business with an insufficiently strong capital structure and a loss-making new business unit, in need of investment”.
No longer able to rely on Bain Capital, LV said in December it would “move swiftly” to reassess its options and explore alternative ways to structure a transaction.
In its first announcement since the failed deal, the mutual said today that non-executive director Seamus Creedon will take over as interim chairman of the mutual, replacing Cook in April.
Creedon has been on LV’s board for two years. He is also on the board of Baillie Gifford Investment Management for Europe.
Prior to LV, he was chairman of Reliance Mutual for 10 years - an insurer which was bought by Nippon Life Insurance of Japan a year after he left.
Alongside Cook’s departure, three more board members will now step down, according to the update.
These include David Barral, who the insurer said will reach his six-year term on March 7, alongside Alison Hutchinson and Luke Savage, who will step down as non-executive directors and board members at the end of March.
"LV is owned by over 1mn members and it is humbling that over 174,000 voted on the proposed transaction which the board put to them in good faith last year,” Creedon said today.
The mutual needed 75 per cent of members to vote in favour of the deal. Some 119,225 members voted in favour of the proposed acquisition, whilst 52,561 members voted against the proposals, representing the remaining 31 per cent of the vote.
“We felt it right to take time to understand the message members gave the board,” Creedon continued.
“Put simply, our members told us that what they viewed as the modest financial advantages of the transaction, were not worth the loss of ownership and voting rights for our million-plus members.
