What to know so far about the Income-Allianz saga
German insurer Allianz announced in July it was planning to buy a majority stake in Singapore's Income Insurance
A possible deal between German financial services company Allianz and Singapore's Income Insurance has dominated headlines for the past few weeks. What's happened so far? In mid-July, Allianz announced it was planning to buy a majority stake in Income Insurance for around US$1.6 billion.
It said it would offer S$40.58 per share for a transaction value of S$2.2 billion (US$1.66 billion), for 51 per cent of the shares in Income Insurance. NTUC Enterprise, meanwhile, currently has a 72.8 per cent stake in the insurance company. It has said it would remain a "substantial" shareholder if the sale goes through. Though still pending regulatory approval, some public figures have raised objections against the proposed deal.
It's led to NTUC Enterprise and Income issuing clarifications and most recently, a lengthy statement rebutting claims related to stakeholders and shares. The crux of the outcry was on how Allianz, as a large multinational, would not be fully aligned with the original mission of the Singapore company - to serve the needs of low-income workers. Singapore's lawmakers have since posed questions on Tuesday (Aug 6), including on the affordability and accessibility of insurance for the mass market.
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Income acquisition to give double-digit ROI, strong home base in Singapore: Allianz CEO
Allianz says acquiring a majority stake in Income Insurance a majority stake in Income will make the German insurance provider the No 1 property and casualty and No 3 health insurance provider in Singapore
German insurance provider Allianz is expecting a "double-digit return on investment (ROI) over time" on its acquisition of Income Insurance, said its chief executive Oliver Baete on Aug 8. Speaking during the company’s second-quarter earnings briefing in Frankfurt, he said: “More importantly, (the acquisition) creates a very strong home base for us. We have been domiciled in Singapore since 1991, but never had an operating business in the city-state.” He added: “Now, we do have it and it is with a leading franchise and we are proud of having the trust of the community to do so.”
Allianz in July revealed plans to buy a 51 per cent majority stake in Singapore’s Income for S$40.58 a share, three months after selling some of its US insurance businesses. NTUC Enterprise will hold up to a 49 per cent stake post-acquisition. Baete noted the US sales took place after the company concluded that the capital required to build a market-leading position in the United States was too much for it. “We are recycling the gains out of the US from selling in a sub-scale space to investing into scale in Asean,” Baete said, adding that a majority stake in Income would propel Allianz “from zero to a leadership position in Singapore”.
“We have been working for a long time on building a partnership with the Singapore community to acquire Income, a leading provider with lots of upside.” He said the acquisition of a majority stake in Income will make Allianz the No 1 property and casualty (P&C) and No 3 health insurance provider in Singapore. It will also have a promising start in the life insurance business. Baete said the investment will make a meaningful difference to Allianz’s presence in South-east Asia. “We actually believe Singapore has the potential to become the Switzerland of South-east Asia,” he added.
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MAS Weighs In on Allianz-Income Deal, Focus on Consumer Protection
Singapore’s Minister for Transport and Second Minister for Finance, Chee Hong Tat, clarified that the Ministry of Culture, Community and Youth (MCCY) had addressed Income Insurance’s social mission and NTUC Enterprise’s rationale for the deal with Allianz. Minister Chee stated that his focus would be on the regulatory perspective of the Monetary Authority of Singapore (MAS).
Former NTUC Income CEO Tan Suee Chieh raised corporate governance issues and expressed concern over the potential erosion of NTUC Income’s social mission in light of its sale to Allianz in an open letter to the Monetary Authority of Singapore (MAS). Last month, Allianz had announced plans to acquire a 51% stake in Singapore’s Income Insurance in a deal valued at approximately SG$ 2.2 billion (EUR 1.5 billion). The MAS assessment emphasized the regulator’s role in promoting a sound financial sector, focusing on insurer risk management and long-term policy protection. When assessing a change in substantial shareholder, criteria like track record, financial soundness, and fitness are considered.
The minister confirmed that MAS was satisfied with Income’s board’s processes in managing conflicts of interest regarding the deal. The chairman of Income Insurance Limited Ronald Ong recused himself from the board’s decision to appoint Morgan Stanley as the financial advisor for the Allianz acquisition deal. This move was made to avoid any potential conflict of interest, as the chairman also holds a senior executive position at Morgan Stanley.
Govt says a competitive insurance market is most effective way to meet insurance needs
He was replying to questions from lawmakers about the proposed deal between Income Insurance and Allianz Europe, and gave MAS’s views on the deal which has attracted vocal opposition over the possible weakening of Income’s social mission. Allianz announced on 17 July that it was planning to acquire a stake of at least 51% in Income Insurance for about S$2.2bn ($1.6bn). NTUC Enterprise now holds a 72.8% stake in Income. NTUC Enterprise acts as the holding entity of a portfolio of businesses on behalf of the National Trade Union Congress (NTUC), NTUC Foundation, SLF (Singapore Labour Foundation), and affiliated unions. Mr Chee pointed out that Allianz Insurance Singapore is ranked 14th in general insurance in the city state with a market share of 2% based on written premiums. He said, “There is no significant overlap between Income and Allianz’s overall insurance business in Singapore, and hence there is no concern about adverse impact of the proposed deal on competition in the sector.
“The insurance market in Singapore is highly competitive. There are currently more than 50 direct insurers in Singapore offering a wide range of insurance products to meet the insurance needs of individuals and businesses. “In both life and general insurance, Income has market shares of less than 10% based on written premium. For many insurance products, Income does not always offer the lowest prices compared to other insurers.
Income-Allianz deal saga: From a minority shareholder’s perspective
A minority Income shareholder suggests Income shares should be offered to the public as an IPO to be listed on the SGX
I have been a shareholder of NTUC Income (now known as Income Insurance Ltd) for more than 30 years since 1991. After purchasing an Endowment Policy from NTUC Income, I was given the option to purchase a small number of shares. The dividend yield of 6% was quite respectable then.
Thereafter, in 2002, I believe, we were given the option to subscribe up to a maximum of 5,000 shares at a par value of $10 per share. Many individual shareholders took up this opportunity and subscribed in full. The 6% dividend yield was decent and the safety of capital was not much of an issue at it's a Government-linked cooperative.
Also, when Mr Tan Kin Lian, the then-General Manager (now known as CEO) and his management team gave 15% bonus shares every five years. This, I believe, was to compensate for the reducing purchasing power of money as NTUC Income shares can only be redeemed at the par value of $10 no matter how long one holds be it 30 or 40.
Questions on Income-Allianz deal tabled in Parliament
MAS considers range of criteria when assessing change in shareholders of DSII including financial soundness and risk management
Several questions were asked about the Income Insurance-Allianz transaction in Singapore’s Parliament on Aug 6.
Chee Hong Tat, Second Finance Minister and Monetary Authority of Singapore (MAS) board member, says: “When MAS assesses the application for a change in substantial shareholder in an insurer, we will consider a range of criteria, in particular, the applicant’s track record, financial soundness, reputation, as well as fitness and propriety. The insurer must also have effective risk management systems and controls so that it can continue to meet its obligations to policyholders for the long-term.”
Allianz Insurance Singapore is ranked 14th in general insurance with a market share of 2% based on written premiums. “There is no significant overlap between Income and Allianz’s overall insurance business in Singapore, and hence, there is no concern about
Monetary Authority of Singapore defends $2.2 billion Allianz-Income Insurance deal
The Monetary Authority of Singapore doesn’t expect Allianz SE’s plan to buy a majority stake in Income Insurance to have adverse impact on competition
Singapore ministers addressed concerns about Allianz SE’s plan to buy a majority stake in Income Insurance Ltd., saying it would be held to account on its commitments and that the potential deal isn’t expected to adversely impact competition in the sector. Europe’s biggest insurer plans to buy at least 51 per cent of Income Insurance from NTUC Enterprise Co-operative Ltd. to strengthen its presence in Asia.
The proposed $2.2 billion (US$1.7 billion) transaction has drawn a firestorm of comments since it was announced last month, including from veteran Singaporean diplomat Tommy Koh and the former chief executive officer of both Income Insurance and NTUC Enterprise, Tan Suee Chieh. In response to questions in parliament on the deal Tuesday, Monetary Authority of Singapore board member Chee Hong Tat said the central bank was satisfied with the processes in place to address conflicts of interest on the appointment of its financial adviser. “Fostering a competitive insurance market with financially strong insurers is a key part of MAS’ approach to ensuring that insurers operate sustainably and serve the public well,” he said. “There is no significant overlap between Income and Allianz’s overall insurance business in Singapore, and hence there is no concern about adverse impact of the proposed deal on competition.” Chee added that Income Insurance has a market share of less than 10 per cent in both life and general insurance in Singapore, based on written premiums, and that it doesn’t always offer the lowest prices.
Founded in 1970 as a co-op society to provide affordable insurance to workers and families, Income Insurance is designated as one of Singapore’s four systemically important insurers. It serves about 1.7 million customers in the country with life, health and general insurance, its website shows. NTUC Enterprise, which also runs businesses across food, health and education, controlled 72.8 per cent of the company as of the end of 2023. “This is an emotive topic,” Minister of State for Culture, Community and Youth Alvin Tan said separately in response to queries in parliament on Tuesday. “This is something that we care about and care about deeply.” While acknowledging the role cooperatives such as Income Insurance play, the reality is that the insurer’s capital buffers have come under pressure due to greater competition, Tan said. “The best way to keep prices affordable is to facilitate competition, ensure options for customers, and put in place a sound regulatory framework,” he added. NTUC’s preference was to retain a majority stake and local ownership in the insurer, but it was unable to find a partner, Tan said. The deal with Allianz was the “best alignment of interests,” he said. The deal, which is subject to regulatory approval, is expected to close by the first quarter of next year.
Income-Allianz Alliance: Are We Just Scared of Singapore Selling Out?
A Singaporean and a German stand before the altar. They’re about to get married—though it’s a marriage of financial convenience. As Allianz slides the ring on Income’s finger, Singaporeans can hold their tongue no longer. “This isn’t like you, Income,” Singaporeans scream. “What about us?” You know Singaporeans are worked up when an issue gets to the point of petitioning. However, concerns about the deal between income insurance and German insurer Allianz—with Allianz as the majority shareholder—have made it hard for a segment of the population to congratulate the happy couple.
From its inception, Income Insurance has always been centred around a “social mission”: to make a difference and support all kinds of Singaporeans who need insurance. But with Allianz at a 51 percent share, online commenters seem to feel that this commitment might be up in the air. Allianz is a for-profit company after all, and the public has rightly flagged that there’s nothing stopping them from abandoning the heart of what Income’s all about. NTUC Enterprise (NE) has tried to give their best assurances that they’ll continue championing for the people—that we’ll still have the Income that Singaporeans know and love. Between the open letters by prominent public figures, the legalese, and the majority of online comments, it’s clear that some feel sceptical that the merged company would protect local interests.
With many just not buying the justifications, it begs the question: What’s really going on? Where are these reservations coming from? Perhaps it’s because Income is a homegrown brand that Singaporeans know and rely on. Seeing a foreign giant take a huge bite of it has touched a sensitive nerve—or more precisely, stoked an unsaid fear of Singapore selling out. Perhaps it’s not really about the technicalities of the deal, and there’s a deeper undercurrent of disillusionment that things existing just for the good of society are slowly becoming a relic of the past—especially now as many continue to struggle with affordability and the cost of living. Perhaps it’s really about the fear of our social safety nets disappearing.
Allianz to become a leader in Singapore insurance market with planned acquisition of majority stake in Income Insurance
Today Allianz – through its wholly owned subsidiary Allianz Europe B.V. – announced a pre-conditional voluntary cash general offer to acquire at least 51 percent of the shares in leading Singapore insurer Income Insurance, subject to regulatory approval. Income Insurance is deeply rooted in its home market, is a trusted household name and serves approx. 2 million policyholders with a full range of Property-Casualty, Health and Life products distributed via agents and financial advisors as well as through bancassurance and direct channels.
Allianz intends to offer SGD 40.58 per share for a total transaction value of approx. SGD 2.2 billion (approx. EUR 1.5 billion) for 51 percent of the shares in Income Insurance. This majority stake is expected to elevate Allianz’s presence in the fast-growing and attractive Singapore insurance market and establishes the company as one of the largest composite insurers in Asia. Singapore is a leading global financial hub, supported by rapid wealth growth and a strong regulatory environment. The acquisition leverages Allianz’s capabilities in underwriting, product development, and data analytics with Income Insurance’s impressive market reach and strengths in distribution, partnerships, and people.
Asia-Pacific is a strategically important growth region for Allianz, having generated almost EUR 7.7 billion in Total Business Volume across its Property-Casualty and Life/Health businesses in 2023. The integration of the businesses would result in top positions for Allianz in all segments – P&C, Health, and Life – in Singapore. It would also position Allianz to realize significant synergy and capital optimization potential. The transaction is expected to generate a double-digit Return on Investment for Allianz in the mid-term. Closing is expected in the fourth quarter of 2024 or in the first quarter of 2025. “We look forward to partnering with Income Insurance, a leading insurer that shares Allianz’s values and commitment to customer excellence“ says Renate Wagner, Member of the Board of Management of Allianz and responsible for the Asia-Pacific region. “This proposed transaction brings two strong businesses together for the benefit of Singapore’s customers and solidifies Allianz’s leadership position in the region.”
Allianz SE
Headquarters in Munich - Founded in Berlin on 5 February 1890 by the then-director of the Munich Reinsurance Company Carl von Thieme
Its asset management division, which consists of PIMCO, Allianz Global Investors and Allianz Real Estate, has €2,432 billion of assets under management (AUM), of which €1,775 billion are third-party assets (Q1 2021). Allianz sold Dresdner Bank to Commerzbank in November 2008.
Founded in Berlin on 5 February 1890 by the then-director of the Munich Reinsurance Company Carl von Thieme (a native of Erfurt, whose father was the director of the Thuringia insurance company) and Wilhelm von Finck (co-owner of the Merck Finck & Co. Bank). The joint company was listed in Berlin's trade register under the name Allianz Versicherungs-Aktiengesellschaft. The company was established with a start-up capital of 4 million marks. The first Allianz products were marine and accident policies that were initially sold only in Germany. However, in 1893, Allianz opened its first international branch office in London, distributing marine insurance coverage to German clientele looking for coverage abroad.
Income Insurance receives Pre-conditional Voluntary Cash General Offer from Allianz Europe B.V.
Capitalised terms used but not defined herein shall have the same meanings ascribed to them in the pre-conditional voluntary cash general offer announcement (the “Pre-Conditional Offer Announcement”) issued by Allianz Europe B.V. on 17 July 2024. Income Insurance Limited (“Income Insurance”) refers to the announcement from Allianz Europe B.V. (the “Offeror” or “Allianz”) on 17 July 2024 in which it stated its intention to acquire at least 51% (the “Offer”) of the Shares in Income Insurance, subject to the fulfilment of the pre-condition (regulatory approval), referred to in paragraph 2 of the Pre-Conditional Offer Announcement. The Offer is also subject to the approval of the shareholders of Income Insurance for the amendments to the constitution and the proposed name change of Income Insurance.
Following the close of the Offer, Allianz will become the majority shareholder of Income Insurance while NTUC Enterprise will continue to retain a substantial stake. As stated in the Pre-Conditional Offer Announcement, Allianz has a strong and profitable presence in Southeast Asia and is committed to investing in Singapore and partnering with a well-respected and trusted local institution. Income Insurance’s market leadership, strong brand equity and established history in Singapore is a strong and compelling rationale for a market leading set-up in Singapore, the regional financial services hub of Southeast Asia.
Allianz believes that the combination of Income Insurance’s strengths and Allianz’s global capabilities is expected to create a highly competitive composite insurer in Singapore. Income Insurance’s competitive strengths can be further enhanced by integrating its capabilities in distribution, partnership, products and people and leveraging Allianz’s global insurance franchise, asset management capabilities, technical excellence, technology and product development, distribution and reinsurance expertise. As stated in the Pre-Conditional Offer Announcement, Allianz intends for Income Insurance to continue to honour the terms of the existing policies underwritten by Income Insurance and ensure a seamless transition with no impact on policyholders. It also intends for Income Insurance to continue participating in national insurance programmes, as well as to continue its social commitment and existing pledge of S$100 million over 10 years from 2021 to promote social mobility among the low-income, support the well-being of seniors, and champion environmental causes.
NTUC Income Insurance
Founded in 1970; 54 years ago
Income Insurance Limited, commonly known as Income and previously also known as NTUC Income, is a composite insurer based in Singapore, offering life, health and general insurance. Initially founded as a cooperative in 1970 under the National Trades Union Congress (NTUC), it was restructured as a public non-listed company limited by shares in 2022 as part of a corporatization exercise. Currently, it has seven branches and lite branches respectively across Singapore, as well as operations in Indonesia, Malaysia, and Vietnam.
The idea of co-operatives, also known as social enterprises, was first conceived at NTUC's Modernisation Seminar in 1969, where delegates from NTUC-affiliated unions gathered to discuss the challenges Singaporean workers were facing. Then, Singapore was a developing nation with a population comprising mostly blue-collar and low income workers. One of the founding leaders of NTUC, Devan Nair, articulated the need for the labour movement to turn into a social institution to serve Singaporean workers in various ways. Then-Finance Minister Goh Keng Swee supported this and urged NTUC to set up social enterprises in areas such as life insurance and essential consumer goods to meet the needs of the working population. NTUC Income was established in 1970. In April 2010, NTUC Income launched the Income Family Micro-Insurance and Savings Scheme (IFMISS), a free insurance scheme for low-income households with young children. In August 2013, NTUC Income became the first insurer in Singapore to provide insurance coverage specially designed for children with autism. The plan provides coverage for medical expenses from accidents and infectious diseases. In December 2014, NTUC Income expanded its insurance coverage for the special-needs community when it unveiled SpecialCare (Down Syndrome).
In 2021, NTUC Income also expanded to Indonesia, Malaysia, and Vietnam with partnerships in those countries, operating by an insurance-as-a-service model. On 6 January 2022, NTUC Income announced it would be restructured from a cooperative to a company and rebranded as Income Insurance Ltd, amid stiff competition in the insurance industry, with no changes to staff and existing policyholders' coverage. NTUC Enterprise would remain the majority shareholder. The corporatisation exercise was completed on 1 September 2022. In July 2024, it was announced that NTUC Enterprise co-operative gave an irrevocable undertaking to sell a majority 51% stake of Income Insurance Ltd to German insurer Allianz.
