Over-50s specialists Saga has agreed a major 20-year deal with a Belgian insurance company.

Saga, founded in Folkestone, will work with Ageas across its motor and home insurance policies to create what it’s calling the Affinity Partnership.

The agreement will see Ageas operate Saga's home and motor insurance products, including its claims, pricing, underwriting, and price-comparison website activities, along with some customer service roles.

Ageas will pay £80million, subject to certain conditions. Further payments of £30m will be paid in 2026 and 2032 if targets are reached. Saga will also receive a commission on policies sold.

The deal also sees Ageas acquire its insurance underwriting business - Acromas Insurance - for £65m. The details of the plan had originally been revealed back in October.

Now it has been secured with the new partnership combining “the strength of the Saga brand, its marketing skills and customer based with Ageas’ extensive and growing UK insuance operations”.

Customers will see the new agreement kick-in by the end of 2025.

Mike Hazell, Saga's group chief executive, said: “This represents an exciting next step for Saga Insurance. This is a complementary partnership which leverages the strength of the Saga brand and customer base, along with Ageas's extensive and growing UK insurance expertise.

"For Saga more broadly, this agreement is in-line with our stated partnership strategy. It demonstrates clear progress as we move to pay down debt and target long-term sustainable growth - for the benefit of all our stakeholders."

Ant Middle, CEO of Ageas UK, added: “I am confident this collaboration will drive increased innovation and competitiveness, benefiting all our stakeholders.”