Richard Rowney, managing director of LV= life and pensions, said the fall in the firm’s annuity business, which funds its equity release lending, had forced a fall in the volume of equity release lending it was able to offer.
He confirmed the provider is in advanced stage talks with several external sources of funding and hopes to be in a position to announce an agreement in the second half of the year.
LV= posted its interim results for the first half of the year today revealing that equity release sales fell 42% over the six months to end of June down to just £33m from £57m in the same period last year.
Rowney said: “We are definitely not winding our appetite to lend on equity release down. Strategically it is a very important area for us.
“Unfortunately as annuity sales have fallen we have had to pull back. That said I hope to be able to announce external funding lines in the second half to allow us to meet rising demand for equity release that we’re seeing in the market.
“We are very advanced in a number of conversations and will match the funding line to demand we see.”
LV= also saw protection sales jump 50% in the first half of the year with the firm selling £144m of policies in the six months to end of June 2015. Over the past 12 months the insurer sold £217m worth of protection policies.
Overall, LV=’s life business posted a 20% rise in sales in the first half bringing total sales for the past 12 months to £1.5bn.
Rwoney said the rise in protection sales had been largely driven by income protection sales.
He added: “We have invested heavily in our technology over the past six months and it has improved the ease of doing business with us – together with seminars we are holding for advisers unused to selling protection this has prompted a rise in the amount of business we’re doing.”
