Over-50s specialist Saga says it has seen growth in insurance policies and has traded in line with expectations for the first four months of 2018.
Ahead of the firm’s AGM today, Saga – which offers travel products as well as insurance – posted a trading update for the period from February 01 to May 31. It said that targeted investment in customer growth had driven its Saga-branded policy count and cruise bookings.
Saga-branded retail insurance policies increased by approximately 1% year on year, supported by 30% and 14% growth in motor and home new business policies, respectively.
Total retail insurance policies for the period were flat, which the firm says is the result of its decision to close its Direct Choice brand in 2017.
Describing the motor and home markets as remaining competitive, Saga said it continues to write new business on attractive terms, with its direct marketing channels representing the majority of new business volumes.
Underwriting “continues to perform well,” with motor claims costs in line with expectations, despite the snow and icy weather conditions experienced during the period.
“We have seen good momentum this year across our travel and insurance businesses, particularly in new motor and home insurance policies, underwriting performance and bookings for our new cruise ship, Spirit of Discovery,” said CEO Lance Batchelor.
“All of this underpins our confidence that we have put in place the right investment to drive the Saga business forward.”
Stockbroker Numis said it believes the results show that Saga’s targeted investment is “driving volume growth.”
The firm commented: “Overall, growth in policy numbers is held back by lower persistency (disclosed at 65.4% in motor at the prelims), which followed the new FCA renewal wording, the increase in IPT and the competitive environment. The statement highlights that the motor and home markets remain competitive, but that Saga is writing business on attractive terms. Motor claims costs are in line with expectations, despite the poor weather conditions at the start of the year.”
The Saga Group’s interim results will be announced on September 27, 2018.
