(Reuters) - Australian insurer Suncorp Group said on Thursday it would sell its New Zealand life insurance business to Resolution Life for NZ$410 million ($246.53 million), sending its shares to a more than 16-year high.

Shares of Suncorp, which had gained a little more than 18% this year by last close, rose as much as 1.6% to A$16.615 as of 0033 GMT, hitting their highest since December 2007, while the broader market was up 0.5%.

"The transaction continues the reshaping of the Suncorp Group, and positions both the general and life insurance businesses for ongoing growth and success," Suncorp CEO Steve Johnston said in a statement.

The company said its New Zealand general insurance business will remain a part of the group.

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Analysts at UBS said they believe the New Zealand life insurance unit, Asteron Life, was not core to the group and the divestment is "strategically attractive", allowing Suncorp to focus on its more attractive general insurance (GI) operations.

The transaction comes at an opportune time as premium rates continue to harden across most lines of the GI business, UBS analysts said.

The deal is subject to regulatory approvals and is expected to complete within nine months, Suncorp said.

($1 = 1.6631 New Zealand dollars)

(Reporting by Himanshi Akhand in Bengaluru; Editing by Subhranshu Sahu)