Saga is nearing an insurance deal with Belgian rival Ageas

Saga said it is in “exclusive negotiations” with a Belgian rival over a partnership with its troubled insurance arm.

As it announced a rise in profits due to growing demand for its cruises, the over-50s group also said it had agreed to sell its insurance business to the same company, Ageas, for £67.5 million.

The update saw shares in Saga rise 9.1 per cent, or 11.4p, to 136.4p.

The companies said last week they were in discussions about a possible deal that would help the country reduce its debt burden.

Saga told its shareholders yesterday that it is in exclusive negotiations with Ageas on a twenty-year partnership in the field of car and home insurance.

Ageas UK would operate Saga’s car and home products, which would generate gross written premiums of more than £479 million for the year to July. Ageas will pay £80 million upfront as part of the deal, and this amount could increase if certain targets are met.

The firms also confirmed that Ageas will acquire the insurance business of Saga Acromas. Ageas UK will pay £67.5 million for the business in a deal expected to close in the second quarter of next year.

Saga boss Mike Hazell said: ‘We are extremely excited about the opportunity to grow our home and motor insurance businesses through this proposed partnership with Ageas.’

Ant Middle, CEO of Ageas UK, said: ‘This proposed deal with Saga fits perfectly with our strategy to grow profitably in the UK personal lines and create powerful partnerships for the benefit of our customers.’