Shares in Saga, the over-50s insurance and holiday specialist, dived almost 40% to hit a record low of 65p after it reported lower profits and warned that earnings would be hit next year.
A "fundamental" rethink will see Saga make changes to its insurance business that are set to cut profit margins.
Saga, which has just over two million customers, also cut the dividend payout to shareholders.
The company added it had written down the value of its business by £310m.
Saga, which said it faced "increasing challenges" in its markets, reported a 5.4% fall in underlying profits to £180m for the year to 31 January.
For the current financial year, it is expecting profits to fall to between £105m and £120m.
After dropping to 65p, Saga's shares had recovered slightly to 70p by midday on Thursday.
Saga's insurance business - along with many other firms in the sector - relied on selling cheap deals to new customers, and rebuilding profits as they renewed their policies.
Customers are increasingly using price comparison websites to take out insurance policies, where the price of the product matters more than having a strong brand - effectively "commoditising" insurance.
However, Saga said it would try to move away from cheap introductory deals, and offer fixed rates for three years.
Lance Batchelor, Saga chief executive of Saga, told the BBC: "Over the past decade our insurance business has been in decline, whereas the other, cruise, side has been flourishing.
"We are now making a change to the way we sell insurance, with the launch of our three-year fixed-price offering for home and motoring insurance."
Saga did better in its travel division, where underlying pre-tax profits rose by 2.4% to £21.1m, although it said "Brexit was putting a clear dampener on customers' willingness to commit to holidays in 2019".
By Simon Gompertz, BBC personal finance correspondent
Saga was seen as having a lucrative hold on older and better off customers happy to stick with a familiar brand, so much so that when it sold its shares in the stock market five years ago, customers bought half of them.
Now investors have seen their holdings drop to less than half the original price and the annual dividend cut. Bookings are down for cruises and holidays, with the uncertainty about Brexit getting some of the blame.
But the big issue has been insurance. The Saga name counts for less now that people are hunting down the cheapest deals on price comparison websites.
And the whole insurance industry is facing a clampdown by the Financial Conduct Authority for charging low prices to start with then pushing up the cost for loyal customers when they renew.
Saga is hoping that by introducing new policies offering a steady price for three years it can make a fresh start.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said Saga's turnaround plan for its insurance arm may be "too little too late".
He added: "In a market where insurance has become highly commoditised, Saga will need to work hard if it's to create a reason for older drivers to knock directly on its door."
Saga's shares have performed badly. It only joined the stock market in 2014, when its shares were 185p a share. They are now trading well under half that at 67p.
Tom Stevenson, investment director at Fidelity Personal Investing's share dealing service, said: "The company admits that it has got a lot wrong in recent years.
"It has squandered its strong brand recognition among its target market of over-50s, trying and failing to compete in a highly competitive and commoditised insurance market when it should have focused instead on what it could do differently.
"That's the new approach and investors must hope that after a disastrous start as a publicly-quoted company, the new Saga ends better than the last one."