Intense competition in the car insurance market hurts profits at LV=

The Bournemouth-based business, which is the UK’s third biggest car insurer with 3.1m policies, posted half-year operating profits of £43.5m at the division in the six months to June 30.

With motor premium rates falling and amid intense competition, LV= chief executive Mike Rogers described the performance as “reassuring”.

He also reported a 23 per cent profits decline in life insurance as new business sales were disrupted by an industry-wide shake-up banning independent financial advisers from being able to take commission as payment.

Operating profits for the group fell 35 per cent to £48.2m, although when factoring in short-term investment fluctuations pre-tax profits more than doubled to £88.4m.

Annuities sales fell as LV concentrated on returns in a competitive market, although this was offset by strong growth in areas such as pensions, savings and investments.

LV= employs 5,700 people and serves over five million customers with a range of financial products. It is the UK’s largest friendly society.