Saga sees cruise business bounce back, but losses jump amid insurance hit
4 April 2023, 08:44
The company said a competitive motor insurance market and regulatory changes had affected both its home and car insurance businesses.
Saga, which offers products and services for the over-50s, said its losses increased more than tenfold last year as it took a major one-off hit to its insurance business.
The company said a competitive motor insurance market and regulatory changes had hit both its home and car insurance businesses. Both sales and the price at which Saga sells insurance have been affected, it said.
It led to Saga taking a £269 million impairment to the goodwill in its insurance business, pushing the company deep into a loss.
Before tax Saga made a loss of £254.2 million in the year to the end of January, up from £23.5 million the year before, it revealed on Tuesday.
Without the impairment and other one-off costs the business swung from a £6.7 million loss in the previous year to a profit of £21.5 million in the latest 12-month period.
Chief executive Euan Sutherland said: “Over the past year, through what continued to be a particularly challenging external backdrop, Saga made progress against its strategy while achieving significant revenue growth and returning to underlying profit.
“Our insurance underwriting business took pricing action to reflect the rise in claims inflation, while our insurance broking business navigated a challenging landscape, adjusting to significant regulatory changes and increased competitive pressure.”
Saga’s cruise business had fared better as it bounced back from the pandemic, Mr Sutherland said.
Its ocean cruises saw revenue more than double to £168.3 million and filled 75% of their available places, up seven percentage points from the year before.
The smaller river cruises section of the business is expected to return to profit this year, the company said.
Mr Sutherland said: “Our ocean cruise business continued to see strong customer demand and bookings for 2023/24 are on track to meet our targets.
“In travel, bookings are significantly ahead of the same point last year and that business will return to profit this year.
“We also took a number of key steps to reposition the business, consistent with the strategy we set out 12 months ago to create ‘The Superbrand’ for older people.”
