Saga in talks with Belgium’s Ageas over insurance tie-up

Over-50s group Saga has confirmed talks with Belgian firm Ageas over a tie-up for its insurance arm as the company looks to reduce its debts.

Saga saw shares rise 10% in morning trading on Wednesday after it said the companies are in discussions over a “potential partnership arrangement”, following media reports.

The cruise holidays-to-insurance firm said a deal is not guaranteed and that a further announcement will be made in “due course”.

In March, European insurance giant Ageas abandoned an attempt to buy Direct Line Group after its proposals were repeatedly rebuffed, with the last approach worth £3.2 billion.

Saga’s insurance division has been struggling amid cost pressures, while the wider business is being weighed down by large debts.

In June, Saga said market conditions for its insurance business remained challenging and it had been taking action to stabilise the division.

The firm – which sells insurance to over-50s, including car, home, travel and health cover – was due to report half-year results on Wednesday, but said late on Tuesday that these would be delayed as it “continues to explore partnership opportunities”.

It is thought the talks with Ageas would see the Belgium-based group make an upfront payment to Saga followed by a series of commission payments in return for taking over the running of parts of the FTSE-listed company’s insurance business.

This would allow Saga to pay down some of the debts on its balance sheet.