Ageas in talks to acquire Saga’s underwriting arm and form major UK affinity partnership

Insurer Ageas has confirmed that it is in negotiations to ink two major deals with Saga, the UK specialist provider of products and services to people aged over 50.

The proposed transaction would see the two firms establish a 20-year distribution partnership for motor and home insurance, as well as Ageas acquire Saga’s underwriting business Acromas Insurance Company (AICL).

Combined, the two deals are set to be worth over £100m to Saga.

It comes as Ageas looks to grow its non-life presence across Europe and its position in the personal lines UK market.

The insurer attempted to expand in February 2024 with the acquisition of Direct Line Group (DLG), although abandoned its pursuit after two of its proposals were rejected.

Speaking about Ageas’ proposed deal with Saga, Hans De Cuyper, chief executive at Ageas, said: “We eagerly anticipate further strengthening our partnership with Saga, a well-known brand in the UK.

“This transaction allows us to grow in a market where we already have real strength and expertise. Ageas has a longstanding tradition of successful partnerships and we are confident that this collaboration with Saga will open new avenues for creating and accelerating profitable growth.”

Mike Hazell, chief executive at Saga, added: “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.”

Terms of the proposed deals

Under the proposed affinity partnership, Ageas’ UK arm would team up with Saga Services Limited (SSL), Saga’s broking business, for the distribution of motor and home products to customers.

The ambition is to go live by the end of 2025, with Ageas UK paying Saga an upfront consideration of £80m.

Additionally, Saga may receive a contingent consideration of up to £30m in 2026, as well as in 2032, subject to certain policy volume and profitability targets being met.

SSL would receive commission on the GWP generated over the term of the affinity partnership.

Meanwhile, the proposed AICL acquisition would be worth £67.5m, with completion of the transaction targeted for Q2 2025.

Ant Middle, chief executive at 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 strengths of 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.”