Saga agrees 20-year partnership with Belgian insurance giant Ageas

saga actions jumped on Monday after the over-50s specialist revealed a two-decade partnership with Belgian insurance giant Ageas.

The deal will see Ageas operate Saga’s home and motor insurance products, including its claims, pricing, underwriting and price comparison website activities.

Saga will oversee your branding and direct marketing and will earn a commission based on a percentage of gross written premiums generated.

Ageas will pay the company £80m up front, contingent on the publication of its 2025 interim accounts without “material uncertainty or auditor qualification” and the extension or refinancing of a corporate bond due July 2026.

The Belgian insurance giant will provide Saga with up to an additional £30 million in both 2026 and 2032 if it meets specific policy volume and profit targets.

Ageas has also agreed to acquire Saga’s Acromas insurance underwriting business for £65m.

Saga intends to partially use the proceeds from the sale to pay down its considerable net debt, which stood at £614.6 million in July.

Mike Hazell, CEO of Saga, said: “Our combined scale and unrivaled knowledge of the over-50s insurance market represents a strong platform from which we can serve even more customers with relevant, innovative and intuitive products.”

‘For Saga, more broadly, this deal is in line with our stated partnership strategy. “It demonstrates clear progress as we move forward to pay down debt and target long-term sustainable growth, to the benefit of all our stakeholders.”

Saga shares rose 10 per cent before moderating to rise 6.8 per cent to 132p just before midday.

Saga was in exclusive talks early last year to sell Acromas to Australian firm Open Insurance Technologies, but they ended without a deal. The deal is expected to be completed in the second quarter of 2025.

The Kent-based company’s insurance business has struggled due to increasing cost pressures from home and motor claims.

Car insurance premiums have risen since the easing of Covid-related restrictions led to parts shortages, rising energy prices and a lower supply of new vehicles.

While inflation has eased, Saga recently revealed that the net combined operating ratio of its insurance underwriting division was 102 percent in the six months ending in July.

Any figure above 100 percent indicates a technical loss.

Russ Mould, investment director at AJ Bell, said: ‘Saga wants to use partnerships to exploit the value of its brand but without having to use as much capital.

‘In theory, this could increase growth prospects and should also help reduce considerable debt. This seems a sensible approach and the agreement with Ageas is an important step forward.

“However, the company has a long way to go to fix its balance sheet and regain its credibility with the market, and post-IPO share price highs are a distant point on the horizon.”