Allianz acquisition aims to enhance Income Insurance's capabilities: NTUC Enterprise

The Singaporean insurer needs strong and continuous capital support.

Following the news of Allianz planning to acquire Income Insurance, the latter must grow to fulfil its obligations to policyholders over the long term, NTUC Enterprise said.

Despite competitive bids, Income Insurance has lost key contracts to global and regional competitors, such as in bancassurance, the Dependants’ Protection Scheme, and group insurance for a large public organisation.

Strong and continuous capital support is essential for growth in this environment, something a social enterprise model alone cannot provide, NTUC Enterprise expressed in a media statement. The competitive landscape has changed since its founding, with over 40 insurers now competing in Singapore's mature market. 

The proposed transaction with Allianz will allow Income Insurance to leverage Allianz’s global insurance franchise, asset management capabilities, technology and product development, distribution, and reinsurance expertise, strengthening its competitiveness.

Lim emphasised that financial sustainability and social responsibility have always been core to NTUC Enterprise and Income Insurance. The combination of Income Insurance’s strengths and Allianz’s global capabilities aims to create a highly competitive insurer in Singapore. 

“As more and more leading businesses embrace stakeholder capitalism in their corporate purpose, social enterprises and co-operatives can no longer claim that they are unique in doing good. Every enterprise must earn its cost of capital to be financially sustainable in the long term. There is a misperception that NTUC Enterprise and Income Insurance have become profit-oriented,” Lim expressed.

“From the start, NTUC co-operatives like Income Insurance and Welcome (now FairPrice) generated surpluses, so that they could be financially sustainable, fulfil obligations to policyholders, reinvest to grow, attract talent, distribute dividends to shareholders, and rebates to members. Going forward, NTUC Enterprise intends for Income Insurance to continue to be an important financially sustainable and socially responsible business, in line with its enduring purpose of empowering financial well-being for all.” he added.