A major insurance partnership between Saga Plc and Ageas got underway this week, it was confirmed on Tuesday, triggering a £60m payment to the over-50s specialist.
Saga first struck a deal to hand over its home and motor insurance operations to Ageas UK just over a year ago, part of wider plans intended to simplify its structure, cut debt and boost the share price.
Under the terms of the deal, the Belgian insurer agreed to buy Saga's underwriting unit Acromas Insurance Company Limited (AICL) for £67.5m.
It also agreed to take on management responsibility for Saga's home and motor insurance broking business in a 20-year partnership, dubbed Affinity, for an upfront payment of £80m.
The sale of new motor policies under Affinity commenced on Monday, Saga confirmed, with Ageas taking on operational responsibility for price-comparison website distribution, pricing and underwriting, claims and customer service.
Saga retains responsibility for the brand and direct marketing, and will earn commission for those services.
Mike Hazell, Saga chief executive, said: "The launch of our insurance partnership with Ageas marks a major milestone in the execution of our strategy, simplifying and de-risking our insurance operations."
With the partnership now live, Sage will receive £60m, less a £5m trade fund paid in advance, of the £80m fee this week.
It will receive the outstanding £20m by the second quarter of 2026, once home new business and policy renewals for both motor and home are taken over by Ageas and the partnership fully rolled out.
The partnership going live also triggered a further £2.5m payment by Ageas to Saga relating to the sale of AICL, which completed in July.
Shares in Saga were largely unchanged at 352.5p as trading got underway on Tuesday morning.