The twofold transaction includes a $35 million quota reinsurance arrangement between the life insurance arm of St Andrew's and an unnamed global reinsurer, as well as a buyout of the share capital of St Andrew's for $30 million.
BOQ will also enter a three-year distribution agreement where Freedom will provide life insurance products to BOQ customers.
Chief financial officer Anthony Rose says the sale represents a better opportunity for St Andrew's to succeed in a competitive market.
"BOQ acquired St Andrews in 2010, and since that time it has made a very strong contribution to the group," says Rose.
"We believe Freedom is better placed to support St Andrew's future aspirations."
The approximate profit to BOQ resulting from the sale will be $8 million.
Managing director Jon Sutton (pictured) echoed that the acquisition is expected to be mutually beneficial for both companies in a volatile industry.
"St Andrew's has made a strong contribution to the BOQ Group since its acquisition in 2010, but industry and business dynamics have changed dramatically in recent years," he says.
"These changing conditions now mean St Andrew's is a better long-term strategic fit for Freedom."
BOQ announced the sale of St Andrew's in tandem with its 1H18 financial results, which were relatively strong across the board.
Cash earnings grew by four per cent to hit $182 million while net profits increased by eight per cent to reach $174 million.
Anthony Rose said there was "growth across all portfolios" of the business, notably in the company's niche commercial segments including medical, dental, retirement living, agribusiness and tourism.
Combined, these niche segments represented $281 million in commercial loan growth over the period.
BOQ's priorities for the second half include upgrading its online platforms, opening new retail channels and improving its tech infrastructure.
"We are moving the technological infrastructure into a modern cloud environment," Sutton says.
"This will improve the speed of project delivery and reduce costs. There are also a number of initiatives across the group that will bring us closer to our customers."
According to Sutton, this includes the impending launch of a new digital payments partnership which aims to improve the way SME customers receive their payments.
At around 11:509am, BOQ shares were down by 1.6 per cent at $10.74.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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