Homeserve signs US deal with AARP over-50s organisation

4th Nov 2014 08:42

The US subsidiary of home emergency business Homeserve has signed an agreement with AARP, a charity organisation that focused on the over-fifties, similar to Saga in the UK.The move is expected to be accretive to its US business by the 2017 fiscal year (FY).Homeserve USA will offer home emergency cover to the proportion of AARP's members who are most "insurance minded", the group said.Initial test marketing is due to begin in December, with rollout during the 2016 financial and into 2017. Marketing returns are expected to be within its normal payback periods.Homeserve said it had continued to see good momentum in its business development in the US, where its pipeline of potential partnerships remains strong."In light of our confidence in our US business, we plan to invest an incremental £5m in marketing and additional business development resource in the US in FY2015, helping drive customer growth and incremental affinity partner signings," the FTSE 250 group said.The net impact of the investment in FY2015 is expected to be fully offset by positive trading performance in other markets."The results of our initial testing with AARP over the next six months will help determine the amount we ultimately invest in marketing and the level of profitability from this agreement. In FY16, we expect a net investment cost of around £6m as we invest in marketing to the AARP customer base."This additional expenditure is expected to be financed in part by a combination of reduced own brand marketing in the US and savings across the group as a whole."