Youi says it will focus on growing its Australian business after announcing the sale of its New Zealand portfolio to Tower.

Tower will pick up Youi’s 34,000 home, contents and motor policies for $NZ13 million ($12.05 million), subject to regulatory approvals.

“This decision now allows us to put all our focus and energy on our Australian business as the scale and diversity of the market offers more growth opportunities for a challenger brand like Youi,” CEO Hugo Schreuder said.

Youi has struggled in New Zealand to recover from widespread accusations three years ago of dodgy sales practices and shoddy treatment of customers.

In January 2017 the South African-owned insurer was fined $NZ320,000 ($296,644) after pleading guilty to engaging in unscrupulous sales practices between July 2014 and February 2016, which saw customers billed for unsolicited policies.

The Insurance Council of New Zealand (ICNZ) also fined Youi a maximum $NZ100,000 ($92,701) in 2016 for misconduct.

Tower CEO Richard Harding says the acquisition accelerates his company’s growth ambitions.

“We are now firmly positioned as a challenger brand focused on delivering good customer outcomes and value for our shareholders,” he said.

In 2017 Tower was subject to a takeover bid by Suncorp, but Suncorp pulled out after New Zealand’s Commerce Commission blocked the deal over competition concerns.