The Bank of Queensland (BOQ) has signed an agreement to sell St Andrew’s Insurance for $23 million to private investment vehicle Farmcove.

BOQ CEO and MD George Frazis says the sale reflects the lender’s stated five-year policy goals made in February to deliver long-term shareholder value and profitable growth as well as improve customer experience.

“The sale of St Andrew’s represents an important strategic milestone for BOQ,” Mr Frazis said. “We are delighted to have secured a buyer that has a long term vision for the business which includes meeting the continued obligations of policyholders.

“The divestment enables us to focus on our niche customer segments while simplifying our business model.”

BOQ says the sale is subject to regulatory approvals and expects to complete the transaction before the end of its current financial year to August 31 2021.

The bank has projected an indicative after-tax loss of $27-30 million from the sale, which will be reflected in the current financial year results.

A BOQ spokesman told insuranceNEWS.com.au the business is not entering into new policy agreements at this time and is focused on supporting existing policyholders.

BOQ bought the insurance business comprising of St Andrews Insurance (Australia) and St Andrews Life Insurance in 2010 from the Commonwealth Bank for $45 million.

The non-life insurance product range includes consumer credit protection, home and contents, landlord, motor and travel.