The boss of insurer LV= has insisted the mutual’s controversial sale to private equity is the “only deal that secures our future” as he faces mounting criticism from politicians and policyholders over the move.
Mark Hartigan, chief executive of LV, told the BBC’s Today programme the 178-year-old insurer’s £530 million sale to US firm Bain Capital was the “best financial outcome” for members.
The sale has taken centre stage as politicians from across the spectrum have united to hit out at the deal, which would see LV lose its status as a mutual.
With one month to go until members vote on the deal, concerns are growing over the group’s future in the hands of a private equity firm and the payouts being offered to members, as well as the motives behind the sale.
Mr Hartigan defended the decision to back the Bain bid and urged members to vote for the sale next month.
He said: “It’s the only deal that secures our future.”
“This is a very important brand and important British business, and it’s the only bid that secures it.”
LV – formerly Liverpool Victoria – was founded in 1843 to allow Liverpool’s poor to cover burial costs. It is currently owned by its 1.2 million customer members.
Under the deal, they would hand over ownership of the group and receive £100 each while with-profits members will be given an additional boost when their policies mature.
Some members have dismissed the payout as being “paltry”.
LV’s board agreed to the Bain capital deal after receiving around a dozen expressions of interest, including a bid from rival Royal London that is thought to have been for £10 million more than Bain.
LV has not disclosed the value of the Royal London approach.
The All Party Parliamentary Group for mutuals wrote a letter to the Financial Conduct Authority earlier this week demanding it release more details surrounding the Bain sale and rival bid interest.
Former deputy prime minister Lord Heseltine has also criticised the deal, urging members to veto the sale.
But Mr Hartigan said Bain was the “only business prepared to invest in our growth”.
“That means saving the jobs that we have and the sites that we operate in,” he added.
He stressed that all options on the table would have seen LV lose its mutual status.
Members will be asked to have their say on December 8 or at an online meeting on December 10, with 75% of votes needed to back the takeover and a minimum turnout of 50%.
Tthere are concerns LV is also planning to push through a rule change that will mean it can override the minimum turnout threshold.
Mr Hartigan told the BBC he would “100%” respect the outcome of the vote.
He also denied reports that management had backed the Bain deal because of guarantees to secure their roles.
“There’s no incentives related to the deal for me or anyone else – the chairman, the board or any part of our management team,” he said.
More than 400 people have now signed a petition on change.org calling for City regulators to stop the demutualisation of LV.
One member who joined the online petition, branded the plans a “betrayal for members”.
“I don’t want my savings to create profits for Bain Capital,” she added.