Saga’s private medical insurance (PMI) sales fell almost 10% in 2024 as the group which specialises in products for people over 50 said it faced tough competition and tighter margins.
The group also paid a £2.6m share of profit to Axa Health after it ended the solus supplier contract with the insurer for health cover to replace it with Bupa.
And it wrote down its insurance broking business by £138.3m following a £104m write-down in goodwill for the same operation in 2023, as post-tax losses surpassed £100m for a second consecutive year.
Saga completed 30,000 PMI policy sales in 2024 through its broking arm, down 9% from the 33,000 it reported in 2023.
It also cited lower renewal margins on PMI which further reduced the revenue and profitability of the operation.
“While sales of PMI reduced slightly, there were net rate inflation pressures in the current year, reducing renewal margins and leading to written gross profit after marketing expenses decreasing by £3.5m,” it said.
When combined with its travel insurance sales, which also fell by 10.3%, gross written premiums for the two businesses fell by 6.3% to £125.5m from £134m.
The firm also operates a general insurance arm for home and motor insurance which it underwrote but is in the middle of completing a sell-off to Ageas.
Post-tax losses break £100m again
Overall, the group saw its after-tax loss grow to £164.9m a 46% increase on the £113m post-tax loss made in 2023.
This included the £138.3m impairment to insurance broking goodwill, which was an addition to the £104m write-down it made to the same business a year earlier.
There were other exceptional items totalling £50.6m which included a £30.8m write-down to software assets “that will no longer drive economic benefit to the group following the transition to the insurance broking partnership with Ageas”.
And it reported restructuring costs of £32.2m, including the expected costs of restructuring insurance broking operations, ahead of the Ageas partnership becoming operational.
The group’s underlying profit before tax of £47.8m was up from £38.2m primarily due to a £23.6m increase in its travel operations which arrange cruises and other trips and insurance underwriting growing by £12m to £10.7m.
Saga group chief executive officer Mike Hazell said he was “very pleased” with the progress it has made over the past 12 months and that it “delivered a strong performance” from a trading perspective.
“This was driven by the strength of our travel businesses, with especially high levels of customer demand for our differentiated ocean and river cruise offers,” he said.
“In addition, we took the significant strategic action necessary to reposition the group for future growth. We completed our strategic review, successfully signed a new 20-year insurance broking partnership with wholly owned UK subsidiaries of Ageas SA/NV and agreed the sale of our insurance underwriting business.
“These achievements materially reduce the risk and complexity of the insurance business going forward and, when combined with our continued strong trading performance, meant that we were able to complete the refinancing of our long-term corporate debt, replacing our 2026 debt maturities with new long-term credit facilities.”
Director departures
Two directors are leaving the board as a result of the Ageas deals to “reflect the group’s new simplified business model” it said.
Executive director Steve Kingshott and senior independent director Sir Peter Bazalgette have left from today.
Sir Peter is chairman of the nomination committee and is also a member of the remuneration committee. Gareth Hoskin will replace Sir Peter as senior independent director, chairman of the nomination committee and as a member of the remuneration committee.
Julie Hopes will also become a member of the nomination committee.
