14-10-2024 (SINGAPORE) In a decisive move that has sent ripples through Singapore’s insurance sector, the government has intervened to block the proposed acquisition of NTUC Income by German insurance giant Allianz. The announcement, made by Culture, Community and Youth Minister Edwin Tong in Parliament on Monday, marks a significant turn of events in what had become a contentious issue.
Minister Tong stated, “After careful consideration, the government has concluded that the proposed transaction, in its current form, would not serve the public interest.” This decision comes in the wake of widespread public concern over the potential impact on Income’s social mission, which has been a cornerstone of its operations since inception.
The proposed deal, unveiled on 17 July, would have seen Allianz acquire a majority stake in Income for approximately US$1.6 billion. NTUC Enterprise had initially stated its intention to remain a “substantial” shareholder post-acquisition.
However, the announcement sparked immediate backlash from various quarters of Singaporean society. Critics, including former NTUC Income CEO Tan Kin Lian and ambassador-at-large Tommy Koh, voiced apprehensions about the alignment of a multinational corporation’s objectives with Income’s original mandate to serve low-income workers.
Particularly vocal was Mr Tan Suee Chieh, who helmed NTUC Income from 2007 to 2013 before becoming Group CEO of NTUC Enterprise. He characterised the proposed deal as a “breach of good faith” and called for regulatory intervention.
In response to initial concerns, NTUC Enterprise chairman Lim Boon Heng had assured that Income would continue its commitment to providing affordable insurance for lower-income customers. Labour chief Ng Chee Meng echoed this sentiment, pledging to maintain affordable premiums for existing low-cost schemes aimed at union members.
