City comment: LV deal is about more than just money — it’s about a way of life

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It’s not just about the money: the fight over LV’s future is a fight over the way of life.

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For many mutual members, the £100 paid by Bain is not just because it is a modest amount, but because it seems too little to make up for the loss of mutual status.

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Mutual insurers are a British innovation that spans hundreds of years. Liverpool Victoria, as it was originally LV, began life in 1843 as a burial society for the poor. People could buy policies for as little as a penny a week to cover funeral costs.

The reciprocal industry and its members are resilient, imbued with a sense of community and pride. The sale of a faceless Wall Street entity such as Bain Capital is opposed to what many believe an organization such as LV should stand on.

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The problem is that the idea gets in the way. Most of the LV’s for-profit members, who own and control the business, are over 70. New members are not replacing those which sadly see their policies mature at the same rate.

LV expects the proportion of members to drop from 23% to just 8% policyholders over the next decade, with gains in its ranks. This would put enormous pressure on the remaining members to pay for the investment needed to keep the business running – many members of the investment would not survive to see a profit.

LV boss Mark Hartigan wants to protect the brand and business while now paying fair pay to policy holders. But for many, money means less than preserving a legacy and idea.

This is a tough sell.

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