Potential investors in Saga have been told that the over-50s specialist sees a “significant opportunity” to expand the customer base of its alternative business structure, Saga Law.
The company, which is owned by private equity company Acromas, is set to float and the prospectus explained how it has successfully diversified from its core travel business.
It said: “For example, in 2013, having identified a significant market opportunity in the over-50s market for the provision of legal services, Saga began providing legal services such as will preparation, conveyancing, powers of attorney and probate in collaboration with a law firm [Parabis].
“Saga is currently targeting the marketing of its legal services to over one million of its policy holders who have an add-on insurance policy for legal cover through Saga. In addition, the directors believe that there is a significant opportunity to provide legal services to its broader customer base.”
Saga has customers in 2.1m households, and has a database with the details of more than 10m people. Nearly nine in 10 Saga customers are repeat buyers, with an average of 2.7 Saga-branded products to their names.
Speaking to Legal Futures last year after the company was awarded its ABS licence, Roger Ramsden, chief executive of Saga Services, said: “A shake-up to legal services is long overdue. Currently the market appears to be stacked in favour of the provider rather than the consumer. We aim to change things so we have created a legal service with customers in mind not the convenience of lawyers.”
The prospectus said that the ban on referral fees in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) is “pushing down the cost of motor insurance claims, and therefore the wholesale price of motor insurance”.
It said: “The directors believe LASPO was largely responsible for the reduction in average premiums within the motor insurance market in 2013, which has created greater price competition within the sector. The group has responded to this downward price pressure by reducing its prices, but has also benefited from corresponding reductions in its claims costs.”
Saga also plans to expand into wealth management, “given the increasingly complex financial planning needs of its customers, the need for a trusted brand in the space, and the high proportion of household wealth held by the over-50s demographic”.