The new CEO of insurance mutual LV=, David Hynam, promised a “new era” for the organisation in a recent interview with the Mail on Sunday.
Hynam took the reigns of the 180-year-old insurer – an icon of the UK mutual movement – in September, following the failed bid by his predecessor Mark Hartigan to sell the business to US private equity firm Bain Capital.
He told the newspaper that he and new LV= chair Simon Moore “’are absolutely committed to being part of the mutual sector, adding that he will throw his weight behind the Co-operatives, Mutuals and Friendly Societies Bill tabled in Parliament by Labour MP Mark Hendrick.
Elements of Sir Mark’s bill have received the backing of the Treasury, and would give co-operatives the option of legally guaranteeing that some or all of their assets are held in common and non-distributable among members.
It is hoped the bill will reduce the risk of demutualisation for the sector and protect assets in the long term for members.
This follows a storm of protest over the bid to sell LV=, which saw a fierce campaign from the press, including the Mail, and MPs on the All Party Parliamentary Group on Mutuals, led by Labour/Co-op MP Gareth Thomas.
“We are a big supporter of the bill,” Hynam told the Mail.
Asked about claims by former executives trying to sell that business that it was not sustainable as a mutual, he said: “All I can talk about is how I see it now, and I do think it is sustainable. We see ourselves in the mutual sector and have no intention of being anywhere else.”
And he said there were no plans to merge LV= with any other organisation. After members rejected the Bain deal, LV= held unsuccessful merger talks with another mutual, Royal London, and Hynam said there were no plans to revive the idea.
Looking ahead, he said: “It is more important for mutuals to have good financial discipline than it is for listed companies. It is members’ money, and you should look after it as if it were your own.”
He added that he was happy with LV=’s capital position and is more concerned about a previous lack of investment than debt; as such, the business is planning a strategic spend over the next five years, focusing on data, service and IT.
“It has been a difficult time at LV over the past year or two, but we are now on a nice stable footing … I want the organisation to move forward. There is a risk that a transaction that never happened is stuck on a permanent cycle, and that is not good for members or the organisation.”
As for the mutal model, he said it has the advantage of allowing a long-term view “because we don’t have shareholders breathing down our neck”.
Mutuals are also “very focused”, he argued. “We don’t try to do everything for everyone, and we don’t have a lot of products out there. We are not trying to stretch the envelope all over the place.
‘Our members told us clearly in a vote they wanted to be a mutual. That is the mandate they have given me. I think there is an opportunity to revitalise. We want a modern mutual sector.’
Responding to the comments, Gareth Thomas MP said: “I welcome the change in direction from Mr Hyman and Mr Moore. It’s good to see LV in safer hands now and backing the modernisation of the rules and regulations governing. What we need now is Ministers determined to help make it easier for Mutuals like LV to raise the capital they need to offer new services and expand.”