NTUC Enterprise affirms commitment to Income Insurance’s social mission
NTUC Enterprise has clarified its position following the news of German financial services company Allianz’s proposal to acquire a majority stake in Income Insurance.
Chairman of NTUC Enterprise, Lim Boon Heng, emphasised that the organisation remains “fully committed to supporting Income Insurance Limited”.
Source: Inclusive Capitalism
NTUC Enterprise is the current majority stakeholder of Income Insurance.
Insurance options will remain affordable
On Tuesday (23 July), diplomat Tommy Koh raised concerns about the Income Insurance-Allianz deal, highlighting that Income Insurance — formerly NTUC Income — was established with a focus on social purpose.
‘Should never be sold’: Tommy Koh speaks up against Income Insurance-Allianz deal
“The idea was to offer insurance to the people at affordable rates,” he wrote.
In a statement released on Thursday (25 July), Mr Lim assured that insurance options will remain affordable and accessible to lower-income customers, citing LUV and SilverCare policies as examples.
He also confirmed that Income Insurance will continue to be part of national insurance programmes in collaboration with the CPF board.
NTUC Enterprise will uphold its role as an active stakeholder to ensure that Income Insurance maintains its social commitments to policyholders.
Allianz deal to strengthen Income Insurance
In the next part of the clarification, Mr Lim went on to explain the benefits of accepting Allianz’s offer.
Source: Reuters
He noted that Income Insurance’s market share in life insurance has been below 10% over the past decade.
Therefore, partnering with Allianz could significantly boost Income Insurance’s competitiveness, relevance, and resilience.
Mr Lim cited the peak of the COVID-19 pandemic as an example, where NTUC Enterprise’s support was crucial in sustaining Income Insurance as its capital buffers were depleted by increased demands.
He stressed that, given the capital-intensive nature of the insurance industry, accepting Allianz’s offer would enable Income Insurance to effectively leverage the former’s strong financial position whenever necessary.
Minority shareholders can tender shares ahead of NTUC enterprise
Mr Lim concluded the clarification by reaffirming that minority shareholders will have the option to tender their shares before NTUC Enterprise when the offer officially launches.
Minority shareholders will be able to sell their shares at S$40.58 each.
This represents a 37.3% premium over Income Insurance’s net asset value per share of S$29.55 as of 31 December 2023.
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Featured image adapted from Google Maps and Bloomberg.
