Saga is currently engaged in discussions with Ageas, a Belgian insurance firm, regarding a potential collaboration aimed at addressing its financial challenges and revitalizing its struggling broking division.

The company, which focuses on services for individuals over 50, is facing difficulties within its insurance sector, notably due to challenging market conditions affecting motor insurance. In response, Saga has opted to implement price increases and reduce its workforce to ensure cost management. Meanwhile, Ageas has been striving to expand its foothold in the UK and attempted to acquire Direct Line Group this year.

Saga’s shares experienced a rise of 10 pence, or 9 percent, closing at 122 pence, bouncing back from an 18 percent drop earlier in the year prior to the news of this possible partnership.

In September of the previous year, Saga halted the process of selling its insurance underwriting division after a proposed sale to Open, an Australian company, was canceled.

Ageas had also sought to purchase Direct Line, making a £3.2 billion bid in March, but that attempt was unsuccessful. The Belgian insurer is looking to leverage the increasing demand for pension and savings solutions stemming from aging populations in Europe and Asia. Ageas, which provides various types of insurance including motor and travel, confirmed their negotiations with Saga but refrained from providing further details at this time.

According to Sky News, the initial agreement under consideration could involve Ageas making an upfront payment to Saga, enabling the latter to pay down some of its debts, as well as offering commission payments in exchange for managing certain segments of Saga’s insurance operations.

Saga did not disclose any specifics about the potential deal value in its public statement and emphasized the uncertainty surrounding the progression of the negotiations. Founded in 1951 by Sidney De Haan, Saga has evolved to become a prominent provider of insurance and financial services, cruises, and holiday packages. The company transitioned to a staff-owned entity in 2004 through a private equity-backed acquisition, and it became publicly listed on the London Stock Exchange in 2014.

Since 2019, Saga has faced challenges in reducing its debt, a remnant of earlier private equity ownership, prompting the sale of assets like its motorcycle insurance and domiciliary care businesses.

In 2020, during the pandemic, Sir Roger De Haan, the company’s former owner, injected £100 million to aid the firm’s recovery.

Saga has delayed its anticipated half-year results, originally scheduled for today, as it pursues possible partnerships that would support its goal of achieving capital-light growth, enhance value, and improve long-term shareholder returns.

While Saga reported that its performance for the first half of the year aligned with expectations, it has yet to announce a new date for the release of its financial results.