Western Australia-based health fund HBF has offloaded its general insurance business to CGU for an undisclosed sum.

Under a distribution agreement, HBF branded insurance policies, such and home and contents, motor and travel insurance will continue to be sold by HBF, but underwritten by CGU.

HBF managing director Rob Bransby said it had become clear HBF's interests were better served as a distributor rather than a manufacturer of general insurance policies.

"This is a deal which makes sense for HBF itself and HBF policy holders," Mr Bransby said in a statement released today.

"It means we'll continue to distribute competitive general insurance products but these will now be provided by an insurer with all the advantages that scale provides."

The majority of HBF's general insurance team in Perth will be transferred to CGU under the agreement, Mr Bransby said.

HBF Health members will continue to receive member discounts when purchasing HBF general insurance products.

Mr Bransby said the sale of the general insurance division would allow HBF to focus on its core business of health insurance.

"Although HBF is a not-for-profit organisation, we have a responsibility to be commercially focused to ensure we build our financial strength for the good of our members, and this deal does exactly that," Mr Bransby said.