Freedom Insurance Group will buy the Bank of Queensland (BOQ) St Andrew’s life and loan protection business in a $65 million deal.

St Andrew’s had an inforce book of $70 million, more than 147 customers and 64 employees at August 31, and contributed about $8 million to BOQ’s after-tax profits last financial year.

Freedom CEO Keith Cohen says the purchase will add capability and management resources and accelerate product diversification, and makes sense for shareholders of the company, which listed in 2016.

“It would take years for us to replicate the St Andrew’s infrastructure,” he said.

The deal includes an exclusive three-year distribution agreement, with an additional two-year option, for Sydney-based Freedom to provide life products to BOQ customers.

BOQ CEO Jon Sutton says St Andrew’s has made a strong contribution since its acquisition in 2010, but industry and business dynamics have shifted dramatically.

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

Commonwealth Bank, National Australia Bank and ANZ have also put life insurance interests up for sale in the past couple of years. 

Completion of the deal, which involves a $35 million quota reinsurance arrangement and cash proceeds of $30 million, is expected in the second half of the year.