uSwitch.com insurance head asks whether merger will see over-50s motor cover 'diluted'
Following the announced merger of the AA and Saga, Aron Thompson, head of insurance at uSwitch.com, commented:
“The forthcoming merger of the AA and Saga will give the group a combined customer base of 17 million**, of which two million* will be car insurance customers. This will make the new group a dominant and influential player within the industry, especially in the over-50s car insurance market.
“With more than 20 million people over the age of 50 in the UK***, it would be very disappointing if the car insurance products currently offered by Saga were in any way scaled down or diluted as a result of this merger.
"Historically, the over-50s market, in particular the over-75s, has been a poor risk group for motor insurers, and as a result it has been badly served by the industry.
"According to a recent report, one in four people over 75 were unsuccessful in even getting a quotation for their motor insurance****..
“There are very few providers offering insurance to this group and, for some time, Saga has very much been the dominant ‘specialist’ in this market for some time.
"However, the recent launch of intune, the new financial services brand from Help the Aged, has presented some stiff competition. While the motor policies offered by intune and Saga are very similar, intune feeds all profits straight back to the Help the Aged charity, which will no doubt appeal to this audience.
“it would be very disappointing if the car insurance products currently offered by SAGA were in any way scaled down or diluted as a result of this merger
Aron Thompson, head of insurance at uSwitch.com
“Unlike intune, this new group will be owned by private equity groups Permira, CVC and Charterhouse.
"We hope that this new powerhouse in the insurance industry is committed to providing good quality products and keeping premiums competitive for everyone.
“Although some insurers such as Castle Cover, Age Concern as well as Saga and intune specialise in providing insurance for the over-50s, we urge consumers of any age to make sure that they look around for the best deal to suit their needs at the most competitive price.”
*Both AA and Saga have around one million car insurance customers each - source AA
** BBC article – 25 June 2006 ‘Saga and AA outline £6bn tie up’
*** Saga website
**** According to Age Concern Report
