Saga trading in line in 'challenging' market

In an update for the period from 1 August 2018 to 15 January 20119, the company said that in the insurance business, motor and home markets continue to be competitive, with falling average premiums and some upward pressure on net rates in Home, impacting broker revenue and profitability.

Saga branded motor and home policy count is broadly stable year-on-year, with increased new business volumes.

Meanwhile, results for its underwriter continue to exceed its expectations, supported by a particularly positive experience for small and large personal injury claims.

The company's travel segment is now fully sold for the 2018/19 year and is 54% sold for its targets for 2019/20, with cruise demand remaining strong.

Saga's membership scheme, Possibilities, added a further 250,000 members since September and now has over one million members.

Chief executive officer Lance Batchelor said: "We are making progress with our strategy to invest in attracting new customers across the business. In a challenging insurance market, the increase in new business has kept our policy count broadly stable.

"Our underwriting business has performed well during the year. Healthy forward sales for our new cruise ships and the growth in membership are encouraging signs for the group."

At 0850 GMT, the shares were down 0.4% to 102.80p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Trading results are all as expected at Saga, a tough insurance market is still weighing on insurance broking, while travel and insurance underwriting remains solid.

"The bigger challenge for the group is keeping the brand relevant to its target market - Saga’s safe, white-haired image doesn’t match up well with how 50-year olds see themselves today.

"A one million person membership scheme shows the brand’s far from dead and demand for new cruises liners is a huge positive - traditionally, Saga’s used the goodwill built by its holiday business to sell its far more lucrative insurance products. But then, Saga’s always had a large and loyal customer base, and we’re yet to be convinced the group’s making the same progress with the current cohort of 50 year-olds as it did with their parents."