Royal London ‘ready to move on’ after failed LV bid

Royal London claimed that after its failed bid for LV it is “ready to move on” as it outlined plans to expand into new products to help Britain’s aging population.

The savings giant, which last year tried to bail out life insurer LV from private equity raider Bain Capital, said it will introduce improved annuity service and more equity-released mortgages to help its members shore up their retirements.

It came as Royal London revealed winnings in 2021 were up 47 per cent to £192m, handing over £169m to 1.8m eligible members.

Unveiling the results, Chief Executive Barry O’Dwyer said the handover was only possible because of Royal London’s structure as it launched a staunch defense of each other’s business model. Mutuals are owned and run by their members for their benefit, not for profit-hungry shareholders.

But their numbers have dwindled as they were snatched up by predators – a fate LV narrowly escaped when its members rejected the Bain acquisition last year.

O’Dwyer said, “We pride ourselves on mutuality and one of the most tangible ways we demonstrate this is through profit-sharing.”

Royal London was founded in 1861 to help families protect themselves from the shame of a poor man’s funeral, and O’Dwyer added that while the business had evolved, its “purpose as a mutual society had never been more relevant “. It was one of the arguments that convinced LV members to avoid Bain, leading to Royal London hitting it with an offer of their own.

Royal London had previously been turned down by LV’s board in favor of Bain in 2020, despite discussions with the rival firm for several years. But LV finally walked away last month, saying it was better off as an independent company, despite earlier claims to the contrary.

O’Dwyer said: “We offered to give them a future together, but they said they can do it themselves now. In a way it’s good to see them moving on and I wish them the best. I want mutuals to be successful.’

Although his bid for LV fell through, O’Dwyer said he had many ideas to boost Royal London’s growth.

“We know that as a nation we are underserved in terms of pensions. People just don’t save enough,” he said.

“This is a structurally growing market because we have to fill this deficit.”

O’Dwyer said it will also seek to expand its range of equity release mortgages, which allow homeowners to free up cash tied up in the value of their property to fund welfare later in life.

He said: “We have an aging population and we have a lot of housing wealth in the UK.

“We need a means to tap into that.”