A niche intermediary delivered a massive blow to insurer-giant Axa this week by switching its £50m motor and caravan account to rival French insurer Groupama.
Last year, Saga provided motor insurance to around 300,000 people – mostly to its target over-50s age group – generating an estimated premium income of more than £50m.
The move is another example of Axa sacrificing market share to improve the profitability of its motor account.
An Axa spokesman claimed Saga had tried to renegotiate a cheaper deal, which would have pushed the book into a loss.
“At the end of the day, we will only do these deals if they make money
and there is a limit beyond which
we will not go,” he said. “The message that we would want to get across
is that we are keen to work with corporate partners. We are happy to approach partnerships on an imaginative basis and we had a good relationship with Saga.”
Under the terms of the deal between Axa and Saga, the insurer was unable to actively sell motor or caravan insurance to the niche intermediary's target market.
Axa's spokesman said the insurer now plans to attack this market in its own right, possibly direct.
He said: “There are a number of other alternatives and we have plans to look at the over-50s sector. We are putting our own plans into place, and we are looking at a number of ways of entering that market.”
It is thought that Axa will now seek to develop affinity partnerships with leisure groups that are popular with this target age range.
Axa had been Saga's motor and caravan insurance risk carrier since 1994.
The Saga loss is the second time in the space of a month that Axa has been ousted from a powerful underwriting position.
Early last month, Zurich took Axa's position as affinity partner for Bradford & Bingley's 80,000 travel insurance policyholders.
A joint statement from Groupama and Saga read: “Groupama is pleased to confirm the commencement of a long-term relationship with Saga for the provision of motor, and caravan insurance to the Saga customer base.
“This builds on an existing relationship where Groupama already underwrites Saga customers' Continental Holiday Homes Insurance.”
