16th Dec 2024 11:17
(Alliance News) - Saga PLC on Monday confirmed a new insurance partnership with, and agreed the sale of its underwriting business to, Belgium's Ageas SA.
Back in October, Saga said it was holding "exclusive" talks with Ageas about the two deals.
The Kent, England-based firm, which provides travel and financial services to those aged 50 and above, said it has established a 20-year partnership for motor and home insurance, called the Affinity Partnership, with Ageas.
Ageas will take on price-comparison website distribution, pricing and underwriting, claims and customer servicing activities, with Saga retaining responsibility for brand and direct marketing.
The partnership is targeted to start in the fourth quarter of 2025.
Saga will receive an upfront payment of GBP80 million as part of the deal, in two tranches.
A further up to GBP30 million could be paid in 2026, and again in 2032, subject to certain policy volume and profitability targets being met.
Saga will receive commission based on a percentage of the gross written premiums generated over the term of the partnership.
In addition, Ageas has agreed to buy Saga's insurance underwriting business, Acromas Insurance Co Ltd for GBP65 million. A further GBP2.5 million will be paid following the 'operational readiness date'.
Completion is expected in the second quarter of 2025, subject to regulatory approvals.
Saga Chief Executive Mike Hazell said the deals represent an "exciting next step", calling it a "winning combination".
"This is a complementary partnership which leverages the strength of the Saga brand and customer base, along with Ageas's extensive and growing UK insurance expertise."
"For Saga more broadly, this agreement is in-line with our stated partnership strategy. It demonstrates clear progress as we move to pay down debt and target long-term sustainable growth - for the benefit of all our stakeholders."
The new sent shares in Saga 8.1% higher to 133.60 pence each on Monday morning.
By Jeremy Cutler, Alliance News reporter
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