n the sale of what I still think of as Liverpool Victoria, but which some marketing folk decided to call LV= back in 2007, there is not much to enjoy.
Either a human facing business, around since 1843, is being sold off against the best interests of the policyholders who are also the owners (for now). Or an old-fashioned insurer has reached the end of the road and needs the embrace of a richer partner.
Neither truth is heart-warming.
Bain Capital is playing the part of the evil private equity kings, against haloed Royal London, the rival bidder which is still a mutual itself.
As heroes go, it has flaws. Royal London has scale, which ought to be good, but it has always seemed a rather corporate, plc style business for a mutual. It invests in private equity funds, for one thing. The chief executive Barry O’Dwyer is in line for a very non-mutual like £3.1 million pay deal this year, and the average pay of even the non-executive directors is about £110,000, which wouldn’t look out of place at any shareholder owned business.
Royal London even sold one of its businesses, RL360 to Vitruvian, a private equity firm, so it is entirely willing to embrace that industry when practicality requires it.
Private equity itself is changing, too slowly, say critics. But Bain has committed to investing in the business and keeping sites open. It doesn’t look like a pump and dump – if that were Bain’s game, there are easier targets than complex insurance businesses.
The board of LV= looked at 12 bidders and decided that Bain Capital offered the best outcome to policyholders. Even those of us not wild about the idea might have to concede that the board are probably right.