Over-50s specialist Saga said it had shelved the sale of its underwriting business today as inflation drags down the potential value of a sale and hampers the performance of its wider insurance business.
In its half-year results, Saga bosses said they had postponed the move despite landing on terms to offload the business.
“In Underwriting, we have paused the process for a potential sale of the business as, while we had established terms for the disposal, the Board believes there is potential to generate greater value once market conditions improve,” said chief Euan Sutherland in a statement this morning.
Saga had been in discussions with a number of suitors since the start of this year to offload the business after it led to a half-year loss and a warning on full-year earnings last September.
The move came as Saga said inflationary pressures continued to drag on its insurance division in the six months to July.
Saga recorded a four per cent dip in underlying profits across the group to £13.4m, adjusted for new accounting standards at the start of this year.
The insurance underwriting business swung to an underlying loss before tax of £3.6m, compared with profits of £15.8m the year prior.
So-called claims inflation has rocked the insurer, estimated at around 15 per cent so far this year. The silver haired specialist said it had also seen an uptick in claims frequency across its third-party damage claims, while bodily injury claims remains “elevated”.
The company also confirmed CFO James Quin would be leaving the business after five years.
Former Co-op man Mike Hazell will take the role.