$65 million insurance sale to Freedom Insurance scrapped

The $65 million sale of Bank of Queensland (BOQ)’s insurance business to under-fire Freedom Insurance Group has been terminated.

The decision to scrap the sale of BOQ’s St Andrew’s Insurance comes soon after Freedom warned of a potential liquidity shortfall in 2019, due to $4 million in customer remediations and no business commissions following damaging revelations at the royal commission, sending its stock to a new low this month.

BOQ said the two parties mutually agreed to terminate the deal after it became clear “that the conditions of the transaction would not be satisfied within the time limits contained in the sale agreement.”

The bank said it 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,” BQQ said in an ASX statement.