Bank of Queensland scraps plan to sell insurance business to FIG

Bank of Queensland (BoQ) has decided to terminate A$65m ($47m) sale of its insurance business, St Andrews, to Freedom Insurance Group (FIG).

A mutual decision was taken to terminate the agreement after the parties realised that the conditions of the transaction would not be satisfied within deadline as mentioned in the agreement.

BoQ in its stock exchange filing said: “Following the termination of the agreement with Freedom, BOQ will continue to assess its strategic options in relation to St Andrew’s.

“In the meantime, St Andrew’s continues to be a strongly capitalised business that remains focused on delivering for its customers and corporate partners.”

The deal was first announced in April this year, when the bank announced its 1H18 financial results and decided to focus on its core banking operations.

The Australian bank acquired St Andrews in 2010.

With head office in Perth, St Andrews Insurance offers a comprehensive suite of consumer credit insurance, and other consumer protection products including credit protection for mortgages and personal loans, credit card protection and ProtectMyHomeLoan.

It also offers a range of quality life insurance products with simple, affordable and straightforward cover and an easy application process.

St Andrews sale

Agreed on in April, Freedom Insurance Group would have distributes life insurance to the bank’s customers for three years.

St Andrew’s had an in-force book of A$70m, over 147,000 clients and 64 employees as on 31 August 2017.

Through this acquisition, the insurer intended to establish underwriting capability and accelerate diversification into a “broader range of insurance products”.

By agreeing to sell the insurance business, Bank of Queensland is following the pattern set by its rivals.

The ANZ Bank sold its insurance business for A$2.85m in December last year. Few months prior to that, the Commonwealth announced its decision to sell its insurance arm to the AIA Group for A$3.8bn.

Multiple Australian firms are going through a period of discomfort, including NAB for several shortcomings.