Saga plc, a specialty provider of products and services including insurance for the over 50’s, has entered into a new quota share reinsurance arrangement with reinsurers New Re (part of the Munich Re group) and Hannover Re for its motor book of business.
The quota share reinsurance arrangement will see 80% of the motor policy underwriting risk from Saga’s in-house underwriter AICL ceded to the pair of reinsurers in a deal beginning 1st February 2019.
The new arrangement provides Saga with three years of reinsurance coverage for its motor book on a rolling basis, with the current arrangement expiring 31st Jan 2019.
This is the first time German reinsurance giant Hannover Re has participated, with the company added alongside New Re for the next quota share term. New Re was already a reinsurance partner for Saga.
The quota share has also been increased for the new arrangement, from 75% to 80%, which Saga said is in line with its strategy, lowering the firms exposure to underwriting risk and supporting the withdrawal of capital from the underwriter.
Lance Batchelor, Chief Executive Officer of Saga, commented, “The new quota share arrangement and the addition of Hannover Re as a partner provides further evidence of the stability and high quality of our underwriting business.
“The increase to 80% in the reinsured share of our in-house underwriter’s motor policy risk continues to reduce Saga’s exposure to underwriting risk which allows the Group to maintain its efficient capital structure.”