UK insurance group Saga, which targets its products at the over-50s market, has signed a quota share deal with two major reinsurance players as it looks to reduce its underwriting risk.
The deal sees NewRe, a unit of Munich Re, and Hannover Re take on 80% of the motor underwriting risk of in-house underwriter AICL. Coming into effect from February next year it means that Hannover Re will be added to Saga’s reinsurance partnership with NewRe and will replace its existing quota share agreement.
According to a Reuters report, the agreement will provide cover for a three-year period on a rolling basis.
“The increase to 80% (from 75%) in the reinsured share of our in-house underwriter’s motor policy risk continues to reduce Saga’s exposure to underwriting risk,” CEO Lance Batchelor, said, as quoted by the newswire.
Saga added that its trading is in line with December guidance that followed a restructure of the business on the back of the collapse of Monarch Airlines.