BOQ joins banking’s mass departure from life insurance

Bank of Queensland (BOQ) has become the latest lender to offload its life insurance business.

The Brisbane-based bank will sell its life business, St Andrew’s Insurance, to listed group Freedom Insurance for $65 million, with BOQ agreeing to distribute the insurance policies for three years.

The sale follows similar moves by ANZ, Commonwealth Bank and National Australia Bank to cut their exposure to wealth management.

Chief executive Jon Sutton said 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,” Sutton said.

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

Sutton said BOQ is building out its business banking in higher growth sectors of the economy and opening up new retail channels.

“Our very strong capital position provides us with flexibility to consider options that will deliver the best value to our shareholders,” he said.