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On October 16, Singapore’s Parliament passed the Insurance (Amendment) Bill, allowing the minister overseeing the Monetary Authority of Singapore (MAS) to block deals involving insurers linked to cooperatives, such as Income Insurance. This decision was influenced by concerns over a proposed acquisition by Allianz of a controlling stake in Income from NTUC Enterprise. The Bill enables MAS to consider the Ministry of Culture, Community and Youth’s views on such applications, addressing public interest. While MPs raised worries about potential impacts on Singapore’s pro-business reputation, the government clarified that the legislation targets cooperative insurers to protect their social missions. The debate also revealed communication issues within government and questions about defining public interest in regulations, but the government remains open to revising deals that meet public concerns.
Allianz Europe B.V. announced on Wednesday, July 17, that it plans to acquire a majority stake in Singapore’s Income Insurance for approximately US$1.6 billion.
Allianz aims to purchase at least 51% of the shares in Income Insurance Limited, pending certain pre-conditions as outlined in the Pre-Conditional Offer Announcement. This acquisition is also subject to shareholder approval for amendments to Income Insurance’s constitution and a proposed name change.
Allianz has offered S$40.58 per share, amounting to a transaction value of S$2.2 billion (US$1.64 billion) for the 51% stake in Income Insurance.
“This majority stake is expected to elevate Allianz’s presence in the fast-growing and attractive Singapore insurance market,” Allianz stated.
Anusha Thavarajah, Allianz Asia Pacific’s regional chief executive officer, emphasized the company’s commitment to investing in Singapore and partnering with a well-respected local institution.
Allianz also expressed its intention to value and invest in Income Insurance’s employees through development, training, and upskilling opportunities to build a resilient and future-ready organization.
Furthermore, Allianz intends for Income Insurance to continue recognizing the union and maintaining good labor management relations as advocated by Singapore’s tripartite partners.
NTUC Enterprise’s chief executive officer, Adeline Sum, affirmed: “We intend for Income Insurance to continue to be an important financially profitable and socially responsible business, in line with its enduring purpose of empowering financial well-being for all, which strongly aligns with Allianz’s values.”
Allianz assured that existing policies underwritten by Income Insurance will be honored and that the transition will be seamless, with no impact on policyholders.
Allianz, with a strong and profitable presence in Southeast Asia, is committed to investing in Singapore and partnering with a trusted local institution. Income Insurance’s market leadership and strong brand in Singapore provide a compelling rationale for a market-leading setup in this regional financial hub.
The combination of Income Insurance’s strengths and Allianz’s global capabilities is expected to create a highly competitive insurer in Singapore, enhancing distribution, partnership, products, and leveraging Allianz Group’s global franchise, asset management, technical excellence, technology, and reinsurance expertise.
Upon closing the offer, Allianz will become the majority shareholder of Income Insurance, while NTUC Enterprise will retain a substantial stake.
For more details, refer to the Pre-Conditional Offer Announcement from Allianz, the board announcement from Income Insurance, and the media statement from NTUC Enterprise at income.com.sg/pre-convgo.
Here’s What People Are Saying about the Deal
“INCOME started life as a cooperative of NTUC like Fairprice. The idea was to offer insurance to the people at affordable rates. A few years ago it was made into a company and ceased to be a cooperative. Now we are told that it may be sold to a German insurance company. I don’t think it’s a good idea to sell INCOME. It was founded to serve a social purpose and a social need. They remain valid today. I wish to argue that INCOME and Fairprice should never be sold.” – Tommy Koh,Ambassador-at-Large, Singaporean Government.
“… We wanted to have as much reach to Singaporeans (the top line), not to maximise profits but to maximise social impact. I hope our leaders are making sound decisions to benefit Singaporeans in the long term. I believe if there is a public outcry, things may still change. It is time to speak up or forever hold your peace.” – Tan Suee Chieh, President of the Institute and Faculty of Actuaries, former Group CEO of NTUC Enterprise and CEO of NTUC Income, Singapore
“… To sell off controlling interest to Allianz, a profit maximizing international financial firm after achieving such a strong and sustainable financial and market position after decades of competent local trade union and government linked ownership is in my humble opinion a strategic policy error that needs serious reconsideration.” – Lam Keong Yeoh, Former GIC economist
Disclaimer
Every effort has been made to ensure the accuracy of the information provided, but no liability will be accepted for any loss or inconvenience caused by errors or omissions. The information and opinions presented are offered in good faith and based on sources considered reliable; however, no guarantees are made regarding their accuracy, completeness, or correctness. The author and publisher bear no responsibility for any losses or expenses arising from investment decisions made by the reader.
