SINGAPORE: Income Insurance will continue to provide affordable insurance for lower-income customers after the deal with Allianz, said NTUC Enterprise chairman Lim Boon Heng on Thursday (Jul 25) amid concerns about the German company buying a majority stake in the co-operative.
"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," added Mr Lim.
Germany's Allianz announced on Jul 17 that it was planning to buy a majority stake in Income Insurance for about US$1.6 billion.
It said it would offer S$40.58 per share for a transaction value of S$2.2 billion (US$1.64 billion), for 51 per cent of the shares in Income Insurance.
NTUC Enterprise currently has a 72.8 per cent stake in Income. It will remain a substantial shareholder if the sale goes through.
In his clarification on Thursday, Mr Lim said: "Income Insurance will continue to provide affordable and accessible insurance options to the underserved and lower-income customers, through products such as the LUV and SilverCare policies.
"Secondly, Income Insurance will continue to participate in national insurance programmes in partnership with the CPF Board.
"Thirdly, Income insurance will also continue to price its products very competitively."
He added that bringing in a "global player with proven insurance and asset management capabilities" would help Income "compete more effectively".
"Income Insurance’s life insurance market share has been less than 10 per cent in the past 10 years," said Mr Lim.
"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.
"Given that insurance has a long tail – people buy policies when they are young, and depend on them when they are old – a strong, thriving and growing insurance company will ensure their expectations are met."
Income Insurance was established in 1970 - the first co-operative society to be set up by Singapore's labour movement, with a social mission to provide affordable insurance to workers and families.
Previously known as NTUC Income Insurance Co-operative, it remains the only insurance co-operative in Singapore. It has about 2 million customers and offers life, health and general insurance, as well as investment-linked products.
There have been concerns about the possible sale, with former CEO of NTUC Income Co-operative Tan Suee Chieh and Ambassador-at-large Professor Tommy Koh among the detractors.
In a Facebook post, Mr Tan cited a quote from Allianz's Group CEO Oliver Baete about the company looking to build "a resoundingly profitable business" and said a co-operative was "diametrically opposite" to what Mr Baete described.
"We wanted to have as much reach to Singaporeans (the top line), not to maximise profits but to maximise social impact," Mr Tan said, urging people to speak up against the deal.
Professor Koh noted Income Insurance's roots in fulfilling a social mission.
"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," he said, referring to the co-operative that runs Singapore's largest supermarket chain.
In a media release on Jul 17, NTUC Enterprise said that Allianz plans to keep Income Insurance's participation in national insurance programmes, and for Income to continue to recognise the union and "uphold the principles of good labour management relations".
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"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," added Mr Lim.
Germany's Allianz announced on Jul 17 that it was planning to buy a majority stake in Income Insurance for about US$1.6 billion.
It said it would offer S$40.58 per share for a transaction value of S$2.2 billion (US$1.64 billion), for 51 per cent of the shares in Income Insurance.
NTUC Enterprise currently has a 72.8 per cent stake in Income. It will remain a substantial shareholder if the sale goes through.
In his clarification on Thursday, Mr Lim said: "Income Insurance will continue to provide affordable and accessible insurance options to the underserved and lower-income customers, through products such as the LUV and SilverCare policies.
"Secondly, Income Insurance will continue to participate in national insurance programmes in partnership with the CPF Board.
"Thirdly, Income insurance will also continue to price its products very competitively."
He added that bringing in a "global player with proven insurance and asset management capabilities" would help Income "compete more effectively".
"Income Insurance’s life insurance market share has been less than 10 per cent in the past 10 years," said Mr Lim.
"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.
"Given that insurance has a long tail – people buy policies when they are young, and depend on them when they are old – a strong, thriving and growing insurance company will ensure their expectations are met."
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Income Insurance was established in 1970 - the first co-operative society to be set up by Singapore's labour movement, with a social mission to provide affordable insurance to workers and families.
Previously known as NTUC Income Insurance Co-operative, it remains the only insurance co-operative in Singapore. It has about 2 million customers and offers life, health and general insurance, as well as investment-linked products.
There have been concerns about the possible sale, with former CEO of NTUC Income Co-operative Tan Suee Chieh and Ambassador-at-large Professor Tommy Koh among the detractors.
In a Facebook post, Mr Tan cited a quote from Allianz's Group CEO Oliver Baete about the company looking to build "a resoundingly profitable business" and said a co-operative was "diametrically opposite" to what Mr Baete described.
"We wanted to have as much reach to Singaporeans (the top line), not to maximise profits but to maximise social impact," Mr Tan said, urging people to speak up against the deal.
Professor Koh noted Income Insurance's roots in fulfilling a social mission.
"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," he said, referring to the co-operative that runs Singapore's largest supermarket chain.
In a media release on Jul 17, NTUC Enterprise said that Allianz plans to keep Income Insurance's participation in national insurance programmes, and for Income to continue to recognise the union and "uphold the principles of good labour management relations".
Continue reading...