MAJOR Dorset employer LV= has returned to profit after a year in which it shed staff in a bid to cut costs.

But the general insurance operation which it has sold off to insurance giant Allianz saw profits drop despite a rise in premium income.

LV= chief executive Mark Hartigan said: “2019 was a pivotal year in the history of LV= and 2020 will be no less important.

“The full effect of the COVID 19 crisis is still to be understood but we are in an exceptionally well-capitalised position and as we face the challenges ahead, we will continue to work hard for the benefit of our customers and members.

“We will strive to do our best to safeguard their interests and come through this ready to focus on our long term sustainability and growth.”

Full year results for 2019, the year it finished selling off its general insurance division, show profit before tax from continuing operations reach £15million – after a loss of £90m the previous year.

Mr Hartigan, who took the top job after Richard Rowney stood down at the end of last year, said: “Our company has an outstanding heritage of service and delivery to members, customers and partners.

“Clearly we are living in unprecedented times. The coronavirus situation is both very serious and rapidly evolving. Our priority remains to focus on the best outcomes possible for our members, customers and staff.

“Notwithstanding the challenging external environment, this is an exciting time to be joining having just converted from a friendly society to a company limited by guarantee and successfully completed the sale of our general insurance business.”

Mr Hartigan said: “We continue to make progress in reducing our cost base with a further £3m decrease in operating expenses primarily driven by a year–on-year reduction in staff numbers. Strong cost discipline will be increasingly important throughout 2020 as we make the transition from our old group structure to a pure life, pensions and investments business.”

LV= said its trading profit on life insurance fell from £50m to 43m, with new business suppressed by difficult trading conditions.

Meanwhile LV= General Insurance, the business which LV= sold to Allianz, saw operating profit fall 13 per cent to £93m, while underwriting profit fell 39 per cent to £60m. But premium income grew 12 per cent to £1.57billion

Steve Treloar, chief executive of LV= General Insurance, said: “We’re all living in unprecedented times and the impact of COVID-19 is being felt by every single one of us, both in our personal and professional lives. Our top priority is the safety of our colleagues, customers, and suppliers, and we’re doing everything we can to support them at this difficult time.

“Now, it almost seems strange to discuss our financial results at a time like this but it’s important that we still provide an update on how our business performed in 2019. I’m therefore pleased to say that our business performed well in 2019 and saw us achieve a robust profit and very strong underlying growth in revenue and customer numbers.”

LV= GI’s number of customers grew 10 per cent to 5.7m.