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Saga in talks with Ageas about insurance arm partnership

Saga is in talks with Ageas, a Belgian insurer, about a potential partnership, as it tries to cut debt and turn around its troubled broking division.
The over-50s travel and financial services group has been trying to tackle problems in its insurance arm which is struggling with tough conditions in the wider industry, particularly for motor cover. Saga has responded by increasing prices and reducing staff to control costs. Ageas has been trying to build its presence in Britain and attempted to buy Direct Line Group this year.
Shares in Saga closed up 10¼p, or 9 per cent, at 122¾p. They had been down 18 per cent so far this year before the disclosure of the potential partnership.
Saga paused a sale process for its insurance underwriting arm in September last year, after a potential sale to Australia’s Open was terminated earlier in the year.
Ageas made an unsuccessful attempt to buy Direct Line with a £3.2 billion takeover bid in March. The Belgian insurer aims to capitalise on the growing demand for pension and savings products from ageing populations in Europe and Asia. Ageas, which offers motor, travel and pet insurance, said: “We can confirm we are in talks with Saga but cannot comment any further on the details at this stage.”
Sky News, which first reported on the talks between the two companies, said that under the proposed deal, Ageas would make an upfront payment to Saga, allowing it to repay some debts. It would also pay subsequent commission payments, in return for taking over running parts of Saga’s insurance operations.
In a statement to the market, Saga did not disclose any valuation and noted that there was no certainty that the deal would proceed. Saga offers insurance, holidays, cruises, and investment and financial services. It was founded by Sidney De Haan in 1951 and passed to his son, Roger De Haan, in 1984, after his father retired.
The business was acquired by staff in 2004 in a deal backed by private equity. The group listed on the London Stock Exchange in 2014. It has been struggling to reduce its debt since 2019, a legacy of previous periods of private equity ownership, and has been selling off assets including its motorcycle insurance and domiciliary care businesses.
Sir Roger De Haan rescued the business in 2020, during the pandemic, when he injected £100 million into the company.
Saga postponed its half-year results, which had been due today, because it was exploring “partnership opportunities to support the group’s capital-light growth ambitions, crystallise value and enhance long-term returns for shareholders”.
The company said its first-half performance was in line with its expectations, but did not give a date for publication of the results.

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