NTUC Enterprise has assured Income Insurance’s shareholders and policyholders amid surprise and disquiet over Allianz’s bid to acquire 51 per cent of the Singapore insurer’s shares for some 1.5 billion euros (S$2.2 billion).
To recap, the German insurer mounted a bid of S$40.58 per share to take a majority stake in the Singapore insurer as it looks to bolster its Singapore presence. The proposed deal is expected to cement Allianz’s position as the top general insurer in the Republic and lift it to the top five insurers in the market.
In a statement on Thursday (Jul 25), NTUC Enterprise assured shareholders and policyholders that it “has and will continue to remain committed” to strengthening Income’s long-term competitiveness as it remains a substantial shareholder even after the offer closes.
NTUC Enterprise said Income will continue to provide affordable and accessible insurance options to the underserved and lower-income customers and price its products “very competitively”. Additionally, Income will continue to participate in national insurance programmes in partnership with the Central Provident Fund (CPF) Board.
Said NTUC Enterprise chairman Lim Boon Heng: “The idea of bringing in a global player with proven insurance and asset management capabilities is to help Income Insurance to compete more effectively in a market that is dominated by regional and global competitors.”
Income, a public non-listed company limited by shares, was deemed “systemically important” by the Monetary Authority of Singapore, alongside AIA Singapore, Prudential Assurance and Great Eastern Life Assurance in September 2023.
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Lim noted that Income’s life insurance market share has been less than 10 per cent in the past 10 years. As a majority shareholder, Allianz would allow Income to be “even more relevant and resilient over the long term”.
He noted that over the years, the Singapore labour movement provided Income with the capital for its business, including an injection by NTUC Enterprise in 2020 to support Income’s solvency at the peak of the Covid-19 pandemic, when the insurer’s capital buffers came under pressure.
“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 added.
NTUC Enterprise is the holding entity and single largest shareholder of NTUC’s social enterprises. Income is the corporatised entity that was formerly the insurance cooperative NTUC Income.
