Keeping majority stake and local ownership ideal, but Income unable to find a willing partner: NTUC
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NTUC has acknowledged the public’s concerns over the sale of Income.
ST PHOTO: SHINTARO TAY
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SINGAPORE - Retaining a majority shareholding in Income Insurance and keeping the insurance provider locally owned would have been ideal.
However, NTUC Enterprise (NE) was unable to find a partner with similar interests, the National Trades Union Congress (NTUC) said in a statement on Aug 5.
NTUC said Income was corporatised in 2022 so that it could have more options to access capital, and that the insurer had explored strategic options with several financial and non-financial institutions, both foreign and local.
“In the end, Allianz’s credentials proved to be strongest, with the interests on both sides aligned,” NTUC said in the statement by its president K. Thanaletchimi and secretary-general Ng Chee Meng.
“Income can meet its long-term commitments to policyholders only if it is sufficiently capitalised, not just for now but well into the future. The offer from Allianz will help to secure this.”
The German insurer on July 17 offered to buy a controlling stake of at least 51 per cent
Should the deal go through, NE will retain a substantial stake of up to 49 per cent in Income, depending on how minority shareholders tender their shares. NE now holds a 72.8 per cent stake in Income.
NTUC’s statement came after NE and Income issued a joint statement
NTUC said that NE had needed to make a choice that was in the best interest of Income’s longevity, and that “a strong industry leader would give Income the backing of two strong shareholders”.
It added that NE will continue to retain a substantial stake in Income, and that Allianz has also committed to honouring Income’s existing policies, continuing its charity commitments and participating in national insurance programmes.
This includes a pledge of $100 million over 10 years from 2021 to promote social mobility among lower-income earners and support the well-being of seniors.
Income has also assured NTUC that it will continue with two low-cost schemes for union members
NTUC said it will ensure that Income upholds this commitment and continues to uphold its social mission of keeping insurance premiums affordable.
“Our portfolio of enterprises – be it in insurance, childcare, eldercare, supermarket or skills training – will continue to provide affordable and quality essential goods and services to Singaporeans. They will also continue to provide choices to customers within the competitive marketplaces in which they operate.”
NTUC acknowledged the public’s concerns over the sale of Income, which was set up in 1970 as its first social enterprise and a key pillar of Singapore’s social infrastructure in its developing years.
It also explained that Singaporeans’ needs and the insurance industry have since evolved, while the country’s social infrastructure has also developed.
“Public healthcare is heavily subsidised. The Government provides universal healthcare coverage with MediShield Life. It created a universal retirement annuity scheme with CPF Life. It has also mandated medical insurance and coverage for workplace injuries,” noted NTUC. It added that its central committee, or highest decision-making body, was briefed on Allianz’s offer and decided to support it “after full and serious consideration”.
“Singaporeans today, including lower-income workers, are well served by our national insurance programmes and our competitive and well-regulated insurance industry,” added NTUC.
