Liverpool Victoria sets sights on Royal Liver
A mutual giant worth £10bn and with more than 5m customers could be born should ongoing merger discussions between Liverpool Victoria and Royal Liver prove successful.
Friendly society: LV is in merger talks with Royal Liver
Any agreed deal would effectively be a takeover of Royal Liver by rebranded LV with no windfall payable to members of either business. LV boss Mike Rogers would probably become chief executive of the group.
The two friendly societies have experienced mixed fortunes. LV, the UK's largest, has assets of £7bn and is a major player in the car insurance and retirement markets.
It has around 3.2m members and customers, and saw operating profits jump 128% to £62.8m in 2008. It has expanded through acquisitions, climbing into the UK's top-five biggest car insurers.
Royal Liver, half the size of Liverpool Victoria which has rebranded itself as LV=, walked away from a merger with mutual insurer Royal London two years ago. Since then, it has stumbled from crisis to crisis.
Crippling losses at its Park Row and Citadel financial adviser subsidiaries have drained capital and forced Woods into a strategic review, sparking the merger talks.
Royal Liver chairman David Woods is a renowned dealmaker who cut his teeth in 2001 selling mutual life insurer Scottish Provident for £1.8bn to Abbey, is doubling as chairman and chief executive.
More recently, Woods was a non-executive director of Resolution, the vehicle created by buccaneering entrepreneur Clive Cowdery to sweep up a series of closed life insurance funds.
Although billed as a merger, Liverpool Victoria would be taking over its crippled rival with Rogers likely to become chief executive. No windfalls would be payable to members of either business. The Financial Services Authority has ordered all mutual insurers to review their businesses urgently amid concerns about their long-term viability.
One stumbling block to a deal is Royal Liver's all-powerful 200 delegates who are elected by policyholders to represent their interests. They can veto any deal and could use this if they believed Liverpool Victoria would axe hundreds of jobs.
Liverpool Victoria said yesterday it would not comment 'on market rumour and speculation'. Royal Liver also declined to make a statement.
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