Saga looks to sell off insurance business to help pay down £721m debt
Saga is reportedly seeking to sell its in-house insurance business in a bid to raise £90m to help pay down its huge £721m debt.
The London-listed company, which offers cruises, package holidays, insurance, and financial services to the over-50s, is looking for buyers for its underwriting arm, according to The Sunday Times.
Any sale of Saga’s underwriting business would see the firm continue to sell home and motor insurance products but instead transfer any risks over to another company, the report said.
City PM approached Saga for comment on the report.
Proceeds from the potential sale would go towards paying off the huge debts Saga has accrued over the previous decade, particularly after its cruise and travel business was decimated by the pandemic.
The firm previously put out a profit warning in 2019, causing its share price to plummet 40 per cent, after it warned of declining customer numbers in its insurance business.
The British conglomerate, which has more than 2m customers, has struggled to retain its position in the insurance sector amid the rise of market comparison websites.
The company has reduced the volume of insurance products it underwrites itself, having also sold off its motorcycle insurance business for £26m in 2020.
Saga chief executive Euan Sutherland, who took up the position in 2019, has previously blamed the firm’s private equity fund ex-owners for overloading the company with debt.
The company chief previously told City PM in 2021 that Saga had failed to modernise under its former PE owners in taking a short-term focus instead of “investing in the future”.
Saga was sold to private equity firms Charterhouse, CVC, and Pemira before it was listed on the London Stock Exchange (LSE) in 2014.
The company, which was founded by Folkstone hotelier Sidney De Haan in 1951, was taken over by Sidney De Haan’s son, Sir Roger De Haan, in 1984.
Saga’s recent crisis, however, saw Sir Roger De Haan return as chairman of the company in 2020.