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Sale of UK insurer to be investigated

Parliamentary group believes deal may not be the best option for members and policyholders

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The All-Party Parliamentary Group (APPG) for Mutuals is going to investigate the potential takeover of mutual insurer LV= by American private equity firm Bain Capital.

The £530m ($727m, €600m) deal was announced in December 2020.

The acquisition is set to be carried out in two stages, with Bain initially purchasing LV=’s subsidiary LVLC alongside its administration and new business infrastructure.

All eligible members will receive an invitation to vote on the takeover, which is expected to be scheduled at some point in H1 2021.

But the APPG has concerns regarding the deal, as it believes it may not be the best option for members and policyholders, and argues that other options, aside from selling to Bain Capital, may have not been considered properly.

Member of parliament and chairman of the parliamentary group Gareth Thomas said on Twitter: “MPs to investigate LV= takeover bid amid fears members could lose out. The APPG for Mutuals are keen to hear from anyone with views on the planned demutualisation of LV=.”

Preserving diversity in the market

According to British newspaper The Times, the mutual insurer’s chief executive, Mark Hartingan, will be invited to give evidence in public.

The APPG, however, has no powers to summon LV=’s boss.

A spokesperson for the insurance firm said: “As part of this process, we have already proactively offered the chair of the APPG for Mutuals a detailed discussion on the transaction with Bain Capital.

“We welcome the opportunity to more formally explain why Bain was singular in offering not only an excellent financial outcome for members but also an unrivalled and long-term commitment to LV=’s future prospects, business and people.”

Peter Hunt, managing partner at Mutuo, the secretariat to the APPG, added: “We’ve yet to see any demutualisation that has been in the long term interest of mutual members.

“Business needs mutuals because they operate to the distinct purpose of serving the interests of customers rather than investors and that diversity should be preserved.

“We look forward to hearing from LV= and others in the course of this inquiry.”

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