Bank of Qld sells insurance unit for $65 million

Bank of Queensland (BOQ) has sold St Andrew’s Insurance to Freedom Insurance Group for $65 million in total.

The transaction comprises a $35 million quota reinsurance arrangement between the life insurance subsidiary of St Andrew’s and a major global reinsurer to be effective immediately before completion.

The remaining cash proceeds of around $30 million will be paid by Freedom as consideration for the acquisition of the share capital of St Andrew’s, BOQ said.

In addition, BOQ will enter an exclusive three-year distribution agreement, with an additional two-year option, with Freedom for the provision of life insurance products to BOQ’s customers.

BOQ chief executive officer Jon Sutton said that the transaction made strategic sense for both parties.

“St Andrew’s has made a strong contribution to the BOQ Group since its acquisition in 2010, but industry and business dynamics have changed dramatically in recent years,” he said.

“These changing conditions now mean St Andrew’s is a better long-term strategic fit for Freedom” he said.