LONDON: Saga Plc is currently in exclusive negotiations with Ageas SA/NV to form a 20-year partnership for motor and home insurance.

As part of this deal, Ageas would also acquire Saga’s Insurance Underwriting business, Acromas Insurance Company Limited (AICL).

This proposed partnership aims to combine the strengths of the Saga brand, its marketing skills, and customer base with Ageas’s extensive UK insurance operations.

The collaboration is expected to drive growth in Saga’s motor and home insurance business while maintaining high standards of customer service.

This partnership builds on the existing relationship between Saga and Ageas UK, a member of Saga’s panel of insurers.

Under the proposed transaction, Ageas (UK) Limited, a subsidiary of Ageas, would enter a 20-year Affinity Partnership with Saga Services Limited (SSL), Saga’s Insurance Broking business. Ageas UK would manage Saga’s motor and home products, which had gross written premiums exceeding £479 million in the 12 months ending July 31, 2024.

Existing partnerships with Collinson for travel insurance and Bupa for private medical insurance would remain unaffected.

Saga’s strategic rationale for this move is to optimize its position in the insurance market by partnering with Ageas. This aligns with Saga’s goal to transition to a capital-light business model, supporting growth, reducing debt, and enhancing long-term shareholder returns.

The terms of the partnership include an upfront payment of £80 million from Ageas UK to Saga, with potential additional payments of up to £60 million contingent on meeting certain targets. Ageas UK would also acquire AICL for £67.5 million, with the transaction expected to complete in the second quarter of 2025, pending regulatory approvals.

Mike Hazell, CEO of Saga plc, said: “We are hugely excited at the opportunity to grow our home and motor Insurance business through this proposed partnership with Ageas.

The coming together of Saga’s fantastic brand and Ageas’s unrivalled expertise in operating successful affinity insurance partnerships, would create a winning combination.

Our joint reputation for delivering exceptional products and services to people over 50, means this partnership would allow us to serve even more customers with great products at excellent value.

“Saga is a unique business with a long heritage, great people and loyal customers. We have been clear for some time that developing a partnership approach is the right strategy, providing us with a capital-light route to growth and the ability to reduce debt, leading to the creation of long-term sustainable value for all our stakeholders.”

Ant Middle, CEO 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.

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.

It also draws on our technical and operational excellence, and customer care, providing more potential for us to leverage the significant investments made in our business over the last three years and offer our expertise in meeting the unique needs of Saga’s customers.”

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