Saga moves towards insurance alliance with Belgian rival Ageas

Saga said it is in “exclusive negotiations” with a Belgian rival over a partnership for its troubled insurance division.

While announcing a rise in profits thanks to booming demand for its cruises, the over-50s group also said it had agreed to sell its insurance underwriting business to the same company, Ageas, for £67.5m. sterling.

The upgrade sent Saga shares up 9.1 per cent, or 11.4p, to 136.4p.

Last week, the companies said they were holding talks about a possible deal, which would help them reduce their debt load.

Saga told its shareholders yesterday that it is in exclusive negotiations with Ageas to establish a 20-year partnership for motor and home insurance.

Ageas UK would manage Saga’s motor and home products, which consisted of gross written premiums in excess of £479m for the year to July. Ageas will pay £80m upfront as part of the deal, and this figure could rise if certain targets are met.

The companies also confirmed that Ageas will buy Saga’s Acromas insurance underwriting business. Ageas UK will pay £67.5m for the business in a deal expected to complete in the second quarter of next year.

Saga boss Mike Hazell said: “We are very excited about the opportunity to grow our home and motor insurance business through this proposed partnership with Ageas.”

Ant Middle, chief executive of Ageas UK, said: “This proposed deal with Saga aligns perfectly with our strategy to profitably grow UK personal lines and create powerful partnerships for the benefit of our customers.”