Listed-British insurer Saga is in exclusive negotiations with Belgium-based insurer Ageas, which result in the sale of Saga’s insurance underwriting business.
The two companies focus on those over 50, and the proposed partnership is designed to drive growth in Saga’s motor and home insurance business.
The proposed partnership would build on the existing relationship between Saga and Ageas UK, which is a member of Saga’s panel of insurers.
Alongside this, Ageas would also acquire Saga’s insurance underwriting business, Acromas Insurance Company, for a total consideration of £67.5m, subject to customary completion adjustments.
Additionally, under the proposed transaction, Ageas UK would enter a 20-year affinity partnership with Saga Services, Saga’s insurance broking business, with the ambition to go live by the end of 2025.
Ageas UK would pay Saga an upfront consideration of £80m, payable at or around the go live date. Saga may receive contingent consideration of up to £30m in 2026 and up to £30m in 2032, subject to certain policy volume and profitability targets being met.
The UK arm of the Belgium insurer would operate Saga’s motor and home products which consisted of gross written premiums in excess of £479m in the 12-month period ended 31 July 2024.
Saga Services’s existing partnerships with Collinson for travel insurance and Bupa for private medical insurance would be unaffected.
According to its announcement to its shareholders, this proposed transaction is consistent with Saga’s aim to move to a capital-light business model to support growth, crystalise value, reduce debt and enhance long-term returns for shareholders.
Commenting on the results, Mike Hazell, chief executive of Saga, said: “We are hugely excited at the opportunity to grow our home and motor Insurance business through this proposed partnership with Ageas.”
While Ant Middle, the chief of Ageas UK, said: This proposed deal with Saga aligns perfectly with our strategy to profitably grow in UK personal lines and in creating powerful partnerships to the benefit of our customers.”
Adding, “deepening our relationship with Saga unlocks even more opportunity to increase our competitiveness in a rapidly expanding over-50s customer segment; an area where we already have real strength and expertise.”