Legal Business Blogs

Investment costs force insurer LV= to pull plug on legal services

In a further setback for insurers hoping to take advantage of the post-Legal Services Act landscape, Liverpool Victoria Friendly Society (LV=)’s legal arm has been discontinued less than two years after it was created through a partnership with Bristol firm Lyons Davidson.

In January 2016 the insurance company joined forces with Lyons Davidson to offer legal advice at a fixed rate for wills, power of attorney, probate, conveyancing, personal injury and employment law.

But LV= today (25 September) confirmed that it was no longer offering legal services in a short message on its website, referring existing customers to Lyons Davidson.

A spokesperson said: ‘While feedback from our customers on the services we provided was very good, the sustainability of LV= Legal Services required scale and significant investment. To ensure we continue providing our customers with great products and quality customer service, it was decided that we’d instead focus on strengthening our capabilities in our core businesses of general insurance and life & pensions.’

The spokesperson also confirmed that despite not being available to new customers, legal services purchased by existing customers will be fulfilled.

LV= Legal Services did not operate as an alternative business structure (ABS) but was instead run buy Lyons Davidson using LV=’s branding. Lyons Davidson has previously entered into similar agreements with other non-legal entities, including another insurer, Admiral. In 2013, Admiral obtained an ABS licence and entered the legal services market as the Lyons Davidson-backed Admiral Law.

Later that year, the Bristol firm entered a joint venture with the AA to create AA Law, AA Law focused on personal injury work and other litigation associated with car accidents suffered by AA members and customers.

But AA Law stopped taking on new work in November 2015, as it concluded that the number of customers using the service did not justify running it as an autonomous business.