Allianz’s plans to acquire 51% stake in Income Insurance for S$2.2 billion is a strategic move aimed at bolstering the latter’s competitive edge in Singapore’s life insurance market, where it currently holds less than a 10% market share.
The partnership with Allianz, a global leader in insurance and asset management, is expected to help Income Insurance compete more effectively in a market dominated by regional and global competitors.
This collaboration is set to enhance the company’s relevance and resilience, enabling it to better serve Singaporean families and fulfill its obligations to policyholders.
The strategic partnership is anticipated to provide the capital support necessary for Income Insurance’s growth, particularly in the capital-intensive insurance industry.
This follows NTUC Enterprise’s crucial capital injection in 2020 during the peak of the Covid-19 pandemic, which was instrumental in supporting the company’s solvency.
Lim Boon Heng, Chairman of NTUC Enterprise, emphasised the organisation’s ongoing commitment to Income Insurance, stating that NTUC Enterprise will remain an active shareholder.
He highlighted that the Singapore Labour Movement has historically provided essential capital to Income Insurance, which was particularly vital during challenging periods like the pandemic.
Lim also noted that the strength of Allianz’s financial position would offer additional support to Income Insurance where required, further bolstering its growth potential.
The offer from Allianz includes an opportunity for minority shareholders to sell their shares at S$40.58 per share, with NTUC Enterprise set to remain a substantial shareholder following the transaction.
Lim added,
“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.”