As the Income Insurance saga rolls on, Singapore’s labour union has sought to quell concerns over its potential sale to German financial services company Allianz.
In a media release on Monday (5 Aug), NTUC said it will ensure Income upholds two existing low-cost schemes for union members.
Income now offers two low-cost schemes for union members – NTUC GIFT and Income Insurance LUV life insurance.
Income has assured NTUC that it will continue with these schemes, said the statement from NTUC President K. Thanaletchimi and Secretary-General Ng Chee Meng.
Source: Ng Chee Meng on Facebook
It will also keep the premiums affordable for policyholders, especially for those in the lower-income segments, NTUC added, assuring:
NTUC will ensure that Income upholds this commitment.
Explaining the need for the Allianz deal, NTUC said Income’s capital buffers had repeatedly come under pressure from a series of crises over the decades, from the Asian Financial Crisis to the recent Covid-19 pandemic.
NTUC Enterprise has put in significant amounts into Income over the years, injecting a total of S$630 million between 2015 and 2020.
Source: Google Maps
Nevertheless, NTUC Enterprise will continue to retain a substantial stake in Income and will continue to support it as a shareholder, NTUC said, adding:
But it cannot do so alone.
That’s why Income was corporatised in 2022 — so that it could have more options to access capital, NTUC said.
Strategic options were explored with several institutions, but, it noted:
Retaining majority shareholding and keeping Income locally owned would have been ideal, but unfortunately, there was no alignment of interests.
Eventually, Allianz’s credentials proved to be the strongest, “with the interests on both sides aligned”, NTUC added.
It was a “hard decision” to make, but it was “in the best interest of Income’s longevity, for the sake of our policyholders”, NTUC said, adding:
We took comfort in knowing that the partnership would enable Income to sustain its social mission for the longer term.
That social mission is one that NTUC remains “deeply committed to”, it said.
As such, it will not change, it added.
NTUC pledged that its portfolio of enterprises will “continue to provide affordable and quality essential goods and services to Singaporeans”.
It will also continue to provide choices to customers within the competitive marketplaces in which they operate, it said, adding:
We will continue to work tirelessly, with compassion and dedication, so all our workers can have better lives and livelihoods.
In reference to the uproar over the potential Allianz deal, NTUC said it fully appreciates “the concerns and feelings shared by many members of the public”.
However, NTUC believes the offer is good for Income and policyholders and “will enable us to fulfil our mission from a stronger position”.
It assured that Allianz had committed to honouring Income’s existing policies.
The German company also agreed to participate in national insurance programmes and continue Income’s charity commitments. This includes the pledge of S$100 million over 10 years from 2021 to promote social mobility among the lower-income and support the well-being of seniors.
The NTUC Central Committee has decided to support NTUC Enterprise’s consideration of the offer from Allianz “after full and serious consideration”.
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Featured image from MS News adapted from Google Maps.
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