Public assured Income Insurance will offer affordable insurance for lower-income customers after Allianz deal

Income Insurance will still offer affordable insurance to its lower-income customers even after Allianz buys a majority stake in the Singapore co-operative, NTUC Enterprise chairman Lim Boon Heng said on Thursday, Jul. 25.

His comments come as a clarification amid concerns that the German company will become a majority stakeholder of a homegrown outfit with about 2 million customers.

Lim said: "NTUC Enterprise will also continue as an active shareholder of Income Insurance to keep it to its purpose and deliver social commitments to its policyholders."

He added that Income Insurance will continue to "price its products very competitively".

Background

On Jul. 17, Germany's Allianz announced it was planning to buy a majority stake for about US$1.64 billion (S$2.2 billion), acquiring 51 per cent of the shares in Income Insurance.

The offer is S$40.58 per share.

After the proposed sale, NTUC Enterprise will remain a substantial shareholder as it currently has a 72.8 per cent stake in Income Insurance.

Lim also reiterated that Income Insurance would continue to take part in national insurance programmes in partnership with the CPF Board.

Making Income Insurance more competitive

"Income Insurance’s life insurance market share has been less than 10 per cent in the past 10 years," Lim said.

To help Income Insurance "compete more effectively", a "global player with proven insurance and asset management capabilities" would help, he added.

"Allianz’s offer to be a majority shareholder will enable Income Insurance to be even more relevant and resilient over the long term, to serve families in Singapore, and fulfil its obligations to its policyholders."

First and only co-op society in Singapore

Income Insurance was set up in 1970 by the labour movement and was previously known as NTUC Income Insurance Co-operative.

It is the first and only co-operative society in Singapore.

Its social mission was to provide affordable insurance to workers and families, offering life, health and general insurance, as well as investment-linked products.

Tapping on capital markets to strengthen business

Being able to tap capital markets would put Income Insurance in a better position.

Lim said: "Insurance is a capital-intensive business, and to grow, there is a need to tap the capital markets. The strength of Allianz’s financial position will provide additional support to Income Insurance where required."

He explained that the Singapore labour movement has provided Income Insurance with the capital for its business over the years.

He said: "One example would be the capital injection by NTUC Enterprise in 2020, which was particularly critical in supporting Income Insurance’s solvency at the peak of the Covid-19 pandemic when its capital buffers came under pressure."

He added that minority shareholders have been asking for share liquidity since Income became a public non-listed company in 2022.

Minority shareholders will be given the opportunity to tender their shares ahead of NTUC Enterprise and can choose to tender all, any or none of their shares at any time during the period in which the offer is open for acceptance, he said.

The launch of the offer is subject to regulatory approval.

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