Saga applauds rebound in travel demand, but insurance arm remains under pressure

Saga applauds rebound in travel demand, but insurance arm remains under pressure

Over-50 group Saga has said it expects annual revenue to rise as much as 50% thanks to a rebound in demand for cruise travel and vacations.

Saga said sales have been boosted by a rebound in holiday demand since the lifting of pandemic restrictions, with the group posting a 40-50% revenue increase from $377.2 million. sterling last year.

However, the holiday financial services firm confirmed a tougher year for its insurance arm after seeing a 3% drop in policy sales and its underwriting business hit by rising claims costs.

Its underwriting division is seeing claims inflation of around 13% as the entire sector is hit by higher costs for repair bills, but Saga said its underwriting division was pushing price increases of two digits.



We continue to go through a challenging period for the UK motor insurance market.

euan sutherland

Troubles at its insurance division caused it to warn of profit last autumn, cutting its full-year pre-tax earnings outlook to £20-30m, down from £35-50m. from the previous year. .

Saga confirmed on Monday that it was in talks to sell the underwriting arm of its insurance division, Acromas Insurance Company, to help pay off its debts.

The group is reportedly looking to raise up to £90m through the sale of Acromas, which underwrites 25-30% of its insurance business, to reduce some of its £721m debt.

Saga said its travel business was set to see revenue increase tenfold over the previous year, but it will report a “small” underlying pre-tax loss due to marketing and administrative expenses, as noted above.

Cruise and travel bookings for 2023-24 are strong, he added.

Euan Sutherland, Chief Executive of Saga Group, said: “We continue to go through a challenging period for the UK motor insurance market and although there has been some pressure on our underwriting business, our retail brokerage result will be in line with expectations. expectations.

“Overall, we are well positioned to continue our growth as we progress through our three-step plan that focuses on maximizing our existing business, gradually shifting our ability to scale while reducing debt, and positioning Saga as ‘The Super Brand’ for older people in the UK.

Shares in the group rose 5% in morning trading on Tuesday.

Leave a Reply

Your email address will not be published. Required fields are marked *