Covid-19 hits Saga’s travel insurance sales but motor and home retention improves

Saga’s retail broking arm has seen a 5% decrease in insurance policies in force to 620,000 for the period from 1 February to 21 June as the coronavirus crisis hit travel insurance sales.

Offsetting this was a six percentage point increase to retention in the broker’s motor and home insurance books, leading to a 1% increase in the number of motor and home policies in force to 567,000.

Saga’s broking arm has also benefited from the launch of a three-year fixed-price policy, with more than 60% of direct new business customers choosing this product since it was fully launched.

The group also announced that treatment abroad for Covid-19 and repatriation to the UK has been included as standard as part of its travel insurance policies for all trips from 1 June, saying that it wanted “to help customers feel more comfortable travelling once the Government advice changes to say that it is safe to do so”.

Saga’s insurance underwriting business, meanwhile, had reserve releases of £20m in the first four months of the year, which is ahead of expectations. The insurer attributed this to “favourable experience on large bodily injury claims relating to prior accident years”.

The insurer also said that current year claims frequency from March onwards has been much reduced as a result of lower miles driven following the start of the Covid-19 lockdown.

The Group has not, however, recognised any Covid-19 related claims upside in current year results or financial projections.

Group chief executive Euan Sutherland said the insurance arm of the business “has been resilient and continues to make progress” while also praising the business’ response to the coronavirus crisis.

“Saga has made good progress against the priorities set last year and we have accelerated this change given the backdrop of the Covid-19 crisis,” he said. “We have been clearly focused on serving our customers and keeping colleagues safe through this period of major disruption. We reacted quickly to the imposition of the lockdown, moving more than 3,000 colleagues to work from home, while maintaining our industry-leading customer service levels.

“I want to thank all our colleagues for their hard work and our customers for the loyalty they have shown to Saga. What is clear is that we play a really important role in the lives of our customers and this underlines my belief in the strength of the brand. I am excited about what we will be able to achieve with a tighter focus on differentiated products and the right investment in strengthening our digital capabilities and driving our brand and membership proposition.”