BOQ Buys Insurance Units From Commonwealth Bank

Vanessa Doctor

28 March 2010

Bank of Queensland has announced plans to buy two of St Andrew's Insurance businesses from Commonwealth Banking Group for an undisclosed sum.

The sale of St Andrews Insurance (Australia) Pty and St Andrews Life Insurance Pty Ltd was welcomed by Graham Petersen, CBA's group executive for wealth management, who said that the transaction represents a good outcome for al parties, including existing St Andrews Insurance staff. All employees under the company will be offered employment contracts within the BOQ Group.

Following the acquition, BOQ will operate St Andrew's as a stand-alone entity. It will maintain the latter's Perth office and its other operations across Australia, BOQ said in a statement.

The buyout does not cover St Andrews Life Insurance's investments, superannuation, retirement income, and financial planning businesses, as they are incorporated exclusively by CBA's wealth management unit.

"St Andrew's insurance largely replicates an existing insurance capability within CommInsure and the sale avoid the complexities and costs of integrating the two insurance business," commented Petersen.

St Andrew's has an annual gross written premium of A$75 million and has around 165,000 policyholders. Final details and regulatory approvals are expected to be ironed out by July.