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Highlights:
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Saga PLC announces exclusive negotiations with Ageas to establish a 20-year partnership for motor and home insurance.
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Ageas will acquire Saga's underwriting arm, Acromas, for £67.5 million as part of the agreement.
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The partnership aims to strengthen service offerings in the over-50s insurance market and is expected to launch by the end of 2025.
Saga PLC {LSE:SAGA} has entered into exclusive negotiations with Ageas to forge a long-term partnership focused on motor and home insurance, spanning two decades. As part of this proposed agreement, Ageas will acquire Saga's underwriting subsidiary, Acromas, for a sum of £67.5 million.
Initial rumors regarding this partnership surfaced earlier in the month, signaling potential strategic developments for both companies. The collaboration aims to enhance the insurance services tailored for the over-50s demographic, a market segment that Saga has long served. Ageas UK chief executive, Ant Middle, stated that this partnership aligns well with the company's strategy to profitably expand within the UK personal lines sector and to foster effective partnerships that benefit customers.
Under the proposed arrangement, Ageas UK will take over the management of Saga's motor and home insurance products, which generated gross written premiums exceeding £479 million for the fiscal year ending July 31. Despite this shift, Saga’s broking business, Saga Services Limited, will continue its operations independently and maintain its existing partnerships with Collinson for travel insurance and Bupa for private medical insurance.
The partnership is projected to commence by the end of 2025, with Ageas UK planning to pay Saga £80 million upon launch. This transaction is contingent on final agreements and regulatory approval, with the sale of Acromas anticipated to close in the second quarter of 2025.
Additionally, Saga released its first-half results, indicating a revenue increase of 13%. However, losses before tax rose by 34%, amounting to £104 million. When excluding goodwill impairments, Saga reported a profit before tax of £27.2 million, highlighting the challenges faced amid the evolving insurance landscape.
