Saga raises profit outlook as travel insurance demand strengthens

Saga has raised its annual profit expectations as strong demand across its insurance and travel businesses supported growth at the UK over-50s specialist.

The company expects underlying profit before tax of between £65 million and £70 million for the full year, up from £44.2 million in the previous year.

In its half-year report, Saga said private medical and travel insurance had also performed strongly following continued investment in marketing and pricing. Policies in force increased by 17% for private medical insurance and 51% for travel insurance during the first half of the year.

Saga also said it now expects to reach annual underlying profit before tax of at least £100 million ahead of its January 2030 target.

Underlying pre-tax profit almost doubled during the six months to 31 July, rising 98% to £46.6 million.

 The performance comes as Saga continues to reshape its insurance operations around a less capital-intensive distribution model.

The company sold its underwriting business, Acromas Insurance Company, to Ageas, with the Belgian insurer taking responsibility for underwriting and claims. Saga has retained ownership of its customer relationships and distribution operations.

The structure allows Saga to continue selling insurance products to its core over-50s customer base without retaining the same underwriting exposure.

Travel insurance remains closely aligned with Saga’s wider travel business, which includes holidays and ocean and river cruises.

However, the company warned of potential pressure during the second half of the year from low river levels in Europe and disruption related to conflict in the Middle East.

The risks underline the exposure of travel businesses – and their insurance and assistance partners – to operational and geopolitical disruption, even as consumer demand remains resilient.

The ability of destinations to withstand disruption is becoming increasingly important as international travel reaches record levels, according to the latest global tourism index from the World Economic Forum (WEF), developed in collaboration with Zurich Insurance.