DORSET-based insurer LV= has announced it is back in the black after revealing losses last year.

The County Gates-based employer has cut costs and reduced staff numbers by 400, although it says redundancies have been kept to a minimum.

Chief executive Richard Rowney says he is “proud” of a “transformative year” for the business.

LV= revealed a profit before tax of £122million for 2017, after reporting a £49m loss for the year before. Its bottom line for 2016 had been hit by a government change to the way personal injury compensation was calculated.

LV= completed the £500m sale of a 49 per cent stake in its general insurance business to Allianz Holdings last December. It has also focused on cutting costs and improving its capital position.

Mr Rowney said: “2017 has been a transformative year for LV= and I am very proud of what we have achieved.

“We secured a landmark strategic partnership with Allianz, delivered the first stages of our £100m investment to transform our general insurance product and distribution capability and brought together our protection, retirement and heritage business areas under a single leadership as we begin to evolve life into a broader health, wealth and knowledge business.

“At a headline level the group’s operating profit was £158m, up from a loss of £12m in 2016 and the profit before tax was £122m compared to a loss before tax of £49m in 2016.”

He said the improvement was due to the one-off nature of the ‘Ogden rate’ change to personal injury claims, as well as contributions from the general and life insurance businesses. The Allianz deal and short-term investment fluctuations were also factors.

Andy Parsons, LV= group finance director, said gross expenses were down by £8m to £431m, including a four per cent reduction in operating costs.

“Savings have largely been achieved through strong day-to-day cost management discipline, a 400 reduction in headcount with minimum redundancies and an on-going review of discretionary spend. We will retain a continued strong focus on costs going forward,” he said.

The business, Britain’s biggest friendly society, was recognised by KPMG Nunwood in its customer excellence report, which saw LV= move up 68 places to rank 32nd across all industries.