Over-50s group Saga has confirmed talks to sell the underwriting arm of its insurance division to help pay off debt.
T.He said the vacation and financial services company is discussing a potential sale of Acromas Insurance Company, which provides about 25% to 30% of its insurance business.
Sagan was looking for a buyer to exit its domestic insurance business to raise up to £90m to pay off part of its £721m debt, according to reports over the weekend.
Saga hasn’t confirmed who they will meet or how valuable the potential deal will be.
Shares were up 3% in Monday morning trading.
This comes after Saga issued a profit warning last September amid challenges in the insurance sector, with claims costs rising across the industry.
Saga lost £257.5m in the six months to 31 July.
At the time, the underwriting department was claiming inflation was around 13%, he said.
Acromas confirmed the sale negotiations and told Saga:
“We have concluded that the potential sale of the Upload business is consistent with the Group’s strategy.”
Group CEO Ewan Sutherland is leading an overhaul in Saga prefecture, where the coronavirus pandemic has hit the cruise and vacation business.
The sale of Acromas will not discontinue the sale of insurance products, but will transfer the risks associated with the insurance policies it offers to another company.
Saga has already reduced the number of products it guarantees.
Author: Holly Williams, PA Business Editor
Source: Belfast Telegraph