BOQ buys St Andrew's insurance

BOQ bought much of the Perth-based St Andrew's life insurance business from Commonwealth Bank. The purchase covers St Andrew's insurance operations but does not include its investments, super or financial planning business, which CBA is integrating into its wealth arm.

BOQ says the deal will bulk up its life insurance offering and allow it to expand into mortgage insurance, helping the regional lender broaden its earnings base. The bank described the move as a bolt-on acquisition aligned with its strategy.

The price was not disclosed publicly. The transaction is believed to be valued in the tens of millions of dollars, according to the article.

St Andrew's sells about $75 million of insurance premiums annually and has roughly 165,000 policyholders. The business is Perth-based and will continue to operate from its existing headquarters.

BOQ expects to operate St Andrew's as a stand-alone entity and will maintain its Perth-based headquarters and staff, which suggests continuity for policyholders and employees under the new owner.

Commonwealth Bank inherited St Andrew's when it acquired Bankwest in late 2008. CBA has since sold much of the St Andrew's insurance business to BOQ while retaining and integrating the investments, super and financial planning parts into its wealth arm.

BOQ chief executive David Liddy called the purchase “a true bolt-on acquisition, in keeping with our strategy,” and said it was not exceptional in size or impact on the bank’s capital. He also noted his contract runs to the end of next year and has previously mentioned one more large acquisition before retiring.

The acquisition is intended to broaden BOQ’s earnings base by strengthening its life insurance footprint and opening up mortgage insurance opportunities. BOQ describes the deal as strategic and not a large capital-intensive transaction.