Income-Allianz deal raises concerns among public, experts; former CEO calls it a ‘breach of good faith’
Associate Professor Shinichi Kamiya of Nanyang Technological University’s Insurance Risk and Finance Research Centre said the acquisition announcement sparked concern because of Singaporean’s historical attachment to Income Insurance.
They fear that it will no longer prioritise the needs of Singapore workers, especially those who are middle- to low-income, he said.
Those concerns are justified since Allianz is a large multinational corporation, he said. “Over time, the new entity’s focus might shift from social good to profit maximisation.”
But on the flip side, the proposed acquisition could also help Income Insurance stay competitive and expand coverage, he said.
“Contrary to public concerns about higher premiums and reduced access to policies, Allianz is likely to preserve Income’s value proposition of providing accessible, comprehensive, and affordable insurance solutions to maintain its prominent position in Singapore,” said Dr Kamiya.
The analysts’ comments came after ambassador-at-large Tommy Koh and Mr Tan spoke up publicly about Allianz’s plan to acquire a majority stake in Income Insurance.
Last week, Allianz announced that it would offer S$40.58 per share for 51 per cent of shares in Income Insurance. The total transaction value would be S$2.2 billion.
The deal is pending regulatory approval.
On Tuesday, Professor Koh posted on Facebook that Income Insurance should not be sold.
“(Income Insurance) started life as a co-operative of NTUC like FairPrice. The idea was to offer insurance to the people at affordable rates,” he said, noting that it became a corporate entity a few years ago.
“Now we are told that it may be sold to a German insurance company. I don’t think it’s a good idea to sell (Income Insurance).
“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,” he said.
Mr Tan, who is also the former group CEO of NTUC Enterprise, referred to a comment by Allianz CEO Oliver Bate, who said that the company is “worried about things that look great from a volume perspective and not so great from a value perspective.”
He said NTUC Income’s values used to be “diametrically opposite”.
“We wanted to have as much reach to Singaporeans (the top line), not to maximise profits but to maximise social impact,” he said.
In a press release last week, Allianz said it intends for Income Insurance to continue participating in national insurance programmes and continue its social commitment to promote social mobility.
Member of Parliament Liang Eng Hwa (PAP-Bukit Panjang), chairperson of the Government Parliamentary Committee for Finance and Trade and Industry, told CNA that he has filed a parliamentary question on Allianz’s plan.
He said he would ask about Income Insurance being sold to a foreign company and his main concern is the affordability and accessibility of insurance, especially to the mass consumer market.
