THE boss of major Dorset employer LV= has said an £80million investment on systems and digital products is cutting costs and boosting productivity.

The County Gates-based friendly society saw operating profit rise 58 per cent to £82million in the six months to the end of June, with pre-tax profit up from £1m to £56m.

Chief executive Richard Rowney said trading had been “very strong”, with growth in both general insurance and the life and pensions business.

In general insurance, premiums were up four per cent to £817m and operating profit was up 123 per cent to £49m. In life insurance, operating profit was up 18 per cent to £33m.

Group expenses were down six per cent to £200m.

Mr Rowney said: “Over the last two years we have invested over £80 million in improving our core systems and developing new digital propositions such as our robo-advice service, Retirement Wizard.

“Our continued investment in digital initiatives is enabling us to both reduce costs and improve productivity. At the same time we are improving customer satisfaction levels and we remain the UK’s most trusted, most recommended and best loved insurer.

“This combination of factors underpins the growth in both our trading businesses and together with the significant capital strengthening actions underway leaves the group well positioned for the future.”

LV= announced in August that it was joining with the Allianz group to create the UK’s third biggest personal insurer.

Mr Rowney added: “At the beginning of August we announced a strategic partnership with Allianz, subject to regulatory approval. Following completion of the transaction we will continue to benefit from a growing general insurance venture while being better able to invest in our core life and pensions business and pursue new digital opportunities. I’m also excited by the potential to work together with Allianz in other areas over the long term.”

Allianz is paying LV= £500m for a 49 per cent stake in its general insurance business LV= will acquire Allianz’s personal home and motor insurance renewal rights, while Allianz will obtain LV=’s commercial insurer’s renewal rights.

In 2019, Allianz will pay £213m for a further 20.9 per cent stake in the general insurance business.

A cost-cutting programme, aimed at saving more than £40m by the end of 2018, began earlier this year. The organisation said savings were largely achieved by “strong day-to-day cost management discipline and an ongoing review of discretionary spend”.

Digital innovations included the launch of an LV= Doctor Services app for new customers, allowing them to access a GP or second opinion via a smart phone. A pre-underwriting tool was introduced for financial advisers, allowing them to check instantly whether a specific illness or condition would mean a higher premium or an exclusion being added to the policy.