Freedom Insurance Group has signed an agreement to acquire Bank of Queensland’s life insurance business, St Andrew’s Insurance, for A$65m ($50.47m).

As per the terms of the agreement, Freedom Insurance Group will distribute life insurance to the bank’s customers for three years.

Commenting on the deal, Freedom Insurance CEO and managing director Keith Cohen said: “St Andrew’s is a high quality business with great relationships and people that complement our business and augment our growth strategy.

“We look forward to welcoming the St Andrew’s team to Freedom. This transaction represents another major step in the Freedom story as we look to realise the tremendous opportunity we see in life insurance” Cohen added.

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 intends to establish underwriting capability and accelerate diversification into a “broader range of insurance products”.

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Subject to finalisation of the reinsurance arrangement, regulatory approvals and other conditions precedent, the acquisition is expected to close in the second half of calendar 2018.

By agreeing to sell 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.