Allianz takes majority stake in Income Insurance – Singapore's ministries react calmly

The planned acquisition of a majority stake in Income Insurance by the German insurance group Allianz has sparked considerable interest and some critical voices in Singapore. Nevertheless, the ministries are confident that the competition in the insurance sector will not be adversely affected. Europe’s largest insurer plans to acquire at least 51 percent of Income Insurance from NTUC Enterprise Co-operative. This transaction, valued at approximately USD 1.7 billion, has elicited numerous comments since its announcement last month, including from experienced diplomat Tommy Koh and former CEO of Income Insurance, Tan Suee Chieh. Chee Hong Tat, Minister for Transport and board member of the Monetary Authority of Singapore (MAS), emphasized that the central bank had duly examined the process for the takeover. "A competitive insurance industry with financially strong providers is central to sustainable operations and public service," he said in Parliament. Considering that there are hardly any overlapping business areas between Income and Allianz in Singapore, there is no concern about an anti-competitive effect of the deal. According to Chee, Income Insurance's market share in Singapore's life and general insurance sector is less than 10 percent, measured by premium income, and the company does not always offer the lowest prices. Income Insurance was founded in 1970 as a cooperative to provide affordable insurance for workers and families, and is one of Singapore's four systemically important insurers. The company serves approximately 1.7 million customers with life, health, and general insurance. As of the end of 2023, NTUC Enterprise held a 72.8 percent stake in the company. Alvin Tan, Minister of State for Culture, Community and Youth, acknowledged that the deal is an emotionally charged issue. He emphasized that Income Insurance’s capital buffers were under pressure due to increasing competition, and NTUC was therefore forced to find the best possible partner—ultimately Allianz. The agreement, which still requires regulatory approval, is expected to be completed by the first quarter of 2024. Critics argue that the transaction allows NTUC Enterprise and other shareholders to realize significant gains. Tommy Koh expressed his regret about the progressive sale of assets on Facebook on July 30, stressing that nothing is sacred to many younger Singaporeans. Former CEO Tan urged in an open letter to the MAS for careful examination of the takeover, as it concerns the reliability of institutions that secure economic welfare and the interest of citizens. NTUC Enterprise and Income Insurance defended the deal as being in the best interest of the company to fulfill long-term commitments to policyholders. Allianz has committed to continue participating in national insurance programs and to invest SGD 100 million in charitable projects. “MAS will ensure that Income and Allianz adhere to their commitments,” Chee concluded.