Singapore Income Insurance’s deal with Allianz raises fears of profit over social mission

Income started as a social enterprise and has had a long-standing objective to provide affordable insurance to Singaporeans, and its sale to a listed company could shift its priorities, they say.

On July 17, Allianz announced it would offer S$40.58 per share for a 51 per cent stake in Income Insurance in a deal worth S$2.2 billion (US$1.64 billion). This represented a 37 per cent premium over Income’s net asset value per share of S$29.55 as at the end of last year.

“This majority stake is expected to elevate Allianz’s presence in the fast-growing and attractive Singapore insurance market,” Allianz said then.

Mak Yuen Teen, a professor of accounting and the director of the Centre for Investor Protection at the National University of Singapore’s Business School, told This Week in Asia: “As a for-profit listed company, this is probably an accurate rationale for the proposed acquisition.

“It is certainly not to advance Income’s social objectives – they wouldn’t want to pay a premium to do that.”

Critics have taken issue with the social enterprise being sold to a foreign, profit-seeking player in a deal which some allege appears to enable NTUC Enterprise and other shareholders to cash out with substantial gains. NTUC Enterprise has a 72.8 per cent stake in the insurer, with the remainder held by institutional and minority shareholders.

Chairman Lim Boon Heng of NTUC Enterprise, Income Insurance’s parent organisation, told local newspaper The Straits Times on Monday that the deal was intended to give the provider a much-needed boost in a market that had become highly competitive so that it could help Income continue to fulfil its social mission.

He cited data from the Life Insurance Association, which showed that Income’s annual