Diplomat Tommy Koh has voiced his objections to Allianz’s recent announcement to acquire a majority stake in Income Insurance, formerly known as NTUC Income.
Source: Esplanade
The news of Allianz’s plan to take over a majority stake was revealed last Wednesday (July 17).
Mr Koh emphasised that NTUC was founded as a cooperative to provide affordable insurance to the public.
Thus, he believes that Income Insurance, along with FairPrice, should never be sold.
Other commentators have also raised concerns about whether Income Insurance might deviate from its original mission.
NTUC Income was established in 1970 as a cooperative by NTUC to provide insurance to underserved workers.
In 2022, NTUC Income transitioned to a public non-listed company limited by shares, allowing it to receive investments from companies like Allianz.
This was not possible when it was a cooperative.
In a Facebook post on Tuesday (23 July), Mr Koh remarked: “A few years ago it was made into a company and ceased to be a cooperative. Now we are told that it may be sold to a German insurance company.”
Source: Tommy Koh on Facebook
He added: “It was founded to serve a social purpose and a social need. They remain valid today. I wish to argue that (Income Insurance) and (FairPrice) should never be sold.”
Besides Mr Koh, others have spoken up against Allianz’s plans to acquire a majority stake in Income Insurance for approximately S$2.2 billion.
Among them is Tan Suee Chieh, former CEO of NTUC Income Co-operative.
Source: Tan Suee Chieh on Facebook
He also took to Facebook on Tuesday to express his views, writing: “At NTUC Income, we maximised value to policyholders but the products had to be sustainable and make business sense.”
We wanted to have as much reach to Singaporeans (the top line), not to maximise profits but to maximise social impact.
“I hope our leaders are making sound decisions to benefit Singaporeans in the long term,” he continued.
Mr Tan further told Channel NewsAsia (CNA) that he views the acquisition as “a breach of good faith”, citing assurances from NTUC Enterprise that it would remain the majority shareholder following the corporatisation in 2022.
Allianz had announced its plan to acquire a 51% stake in Income Insurance, offering S$40.58 per share.
Source: Life Insurance International
Allianz stated that this majority stake would enhance its presence in the rapidly growing and attractive Singapore insurance market, positioning the company as one of the largest composite insurers in Asia.
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Featured image adapted from Esplanade and Reuters.
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