Insurers are keen to play down the impact of the £6.35bn merger
Two weeks may have passed, but the story hasn't changed.
Two of the most trusted brands in the market have become one, the private equity goons haved pocketed their billions and, but for a few faint whimpers, the insurance industry says it’s business as usual.
Indeed, the merger of Saga and the AA may have created a stir in the financial world, but insurers and brokers have been particularly keen to assert that they will be unaffected. They say that Saga and the AA play to different audiences and, as result, opportunities for commercial cohesion will be limited.
But just how limited are the horizons of a £6bn behemoth?
“There is little doubt that insurers will fight tooth and nail to stay in the AA picture.
While it is certainly true that the deal is about growth, combined clout and cross-selling, not even the AA is prepared to deny that the merger could facilitate a change in their distribution model. The company’s line of “never say never” is aptly vague.
Saga, for their part, insist that the two businesses will remain separate, but have said they will look – at the very least – to add their name to the AA's illustrious panel.
Another possibility, though, is that they will add their name – and remove all 20 others.
Analysts point out that an insurance company imposing their will on a broker in this way is par for the acquisitional course.
“Analysts point out that an insurance company imposing their will on a broker in this way is par for the acquisitional course.
There is certainly little doubt that insurers will fight tooth and nail to stay in the AA picture.
Until the deal is concluded in August, rumours of redundancies and flotation continue to circulate. Long before then, however, it is likely the business operations of the AA and Saga will start to overlap. The question is to what extent the former will become obscured entirely, even if its brand is positioned to remain in the limelight.
15 million customers, after all, can’t be wrong.
