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LONDON (Reuters) - British over-50s travel and insurance company Saga (L:SAGAG) is forming a joint venture with Tilney Bestinvest, a UK-based investment and financial planning firm, as pension reforms put pressure on insurance companies to find new business.
The new venture, called Saga Investment Services, will offer customers wealth and investment advice and services, the insurer said on Thursday in an update to investors at a capital markets day.
Surprise reforms announced by the British government in 2014 mean Britons are no longer forced to buy a guaranteed income - an annuity - at retirement, so savers can do what they like with their money when the rules take effect in April.
"The strategy that we outline today shows how we intend to use these competitive strengths to unlock the potential of our existing businesses and to continue to explore new areas of growth, while maintaining our capital-light, cash-generative operating model," said Lance Batchelor, Saga chief executive.
The travel to insurance company, which listed on the London Stock Exchange in May 2014, also announced trading in line with expectations and said its dividend for 2014/15 is expected to be at the top end of the targeted 40-50 percent pay-out range.