Saga signs new reinsurance agreement with NewRe and HannoverRe

Saga has signed a new reinsurance agreement with NewRe and Hannover Re.

The FTSE 250 over-50s travel and insurance group has entered into a quota arrangement to cover 80% of the underwriting risk of motor policies of the group's in-house underwriter, AICL, to take effect from 1 February 2019.

The new quota share agreement, which provides three years of cover on a rolling basis, adds Hannover Re to its current reinsurance partner NewRe and replaces Saga’s existing quota share arrangement which is due to expire at the end of January 2019.

Saga said the increase of its quota share arrangement from 75% to 80% share is in line with its overall strategy and further reduces its exposure to underwriting risk, which will continue to support the withdrawal of capital from the underwriter.

The company also gave a very brief update on trading, saying it continues to be in line with the guidance given in December 2017.

Chief executive officer Lance Batchelor said: "The new quota share arrangement and the addition of Hannover Re as a partner provides further evidence of the stability and high quality of our underwriting business.

“The increase to 80% in the reinsured share of our in-house underwriter's motor policy risk continues to reduce Saga's exposure to underwriting risk which allows the group to maintain its efficient capital structure."