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.
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
