Saga agrees to a 20-year partnership with major Belgian insurance company Ageas

Where is it? It was jumped on Monday after the 50-year-old specialist revealed a twenty-year partnership with the Belgian insurance company Ageas.

The deal will see Ageas manage Saga’s home and motor insurance products, including its claims, premiums, premiums and price comparison website operations.

Saga oversees its branding and direct marketing, earning a commission based on a percentage of recorded sales.

Ageas will pay the firm £80million up front, contingent on it publishing its accounts for 2025 without ‘assets or auditors’ marks’ and extending or refinancing a maturing corporate bond in July 2026.

The Belgian insurer will offer Saga an additional £30 million in 2026 and 2032 if it meets specific policy and profit targets.

Ageas has also agreed to buy Saga’s Acromas insurance portfolio business for £65million.

Saga plans to use part of the proceeds of the sale to pay down its large net debt pile, which reached £614.6 million in July.

Mike Hazell, CEO of Saga, said: ‘Our combined scale and knowledge of the insurance market spanning over 50 years provides us with a strong base from which to serve clients and relevant, innovative and thoughtful products.

‘For Saga, more broadly, this agreement is in line with our partnership strategy. It shows progress as we move to pay down debt and pursue long-term sustainable growth – to the benefit of all our stakeholders.’

Saga shares jumped 10 per cent before settling 6.8 per cent higher at 132p before midday.

Saga spoke exclusively earlier last year to sell Acromas to Australian firm Open Insurance Technologies, but these ended without a contract. The completion of the work is expected in the second quarter of 2025.

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

Car insurance premiums have risen since the unwinding of Covid-related tensions due to a shortage of spare parts, rising energy costs, and a limited supply of new cars.

Although growth has moderated, Saga reported 102 percent growth in the six months to the end of July.

Numbers above 100 percent indicate loss of value.

Russ Mould, investment director at AJ Bell, said: ‘Saga wants to use relationships to leverage the value of its brand but without spending too much money.

‘In theory, this could increase room for growth and also help tackle the huge debt pile. This seems like a smart move, and Ageas’ work is a big step forward.

‘However, the business has a long way to go to repair its balance sheet and restore its credibility to the market, with post-IPO share price highs a long way off.’