LV= makes pre-tax loss but after-tax profit

Mutual insurance, retirement and investment group LV= made an after-tax profit of £21.3m in 2010, compared with a loss of £172.2m in 2009.

However, the group failed to return to profit on a pre-tax basis, posting an IFRS pre-tax loss of £18.3m in 2010, compared with a loss of £91.4m in 2009.

LV= attributed the pre-tax loss mainly to a decision to reserve an additional £165m for future bonus payments.

Group-wide net earned premiums increased 43% to £1.65bn from £1.15bn. Group underlying profit increased 118% to £96.2m from £44.2m.

"LV= performed very well in 2010 despite ongoing turbulent market conditions,” said LV= group chief executive Mike Rogers in a statement. “Sales were extremely strong driving a doubling of underlying group profit and we are now performing competitively in our chosen product areas. We have also received widespread industry recognition for high customer service levels and product quality from organisations including Consumer Intelligence, Moneywise, Which Money and Defaqto."

As previously reported, LV=’s general insurance business made a profit before tax of £35m in 2010, up sharply in 2009’s £2m. The increase was driven mainly by a rise in investment income to £73m from £41m.