There has been public outcry around the plan to sell a majority stake in the former NTUC Income co-operative to a foreign multinational. But a viable, competitive Income Insurance is in the best interests of Singaporean customers, says NUS Business School's Lawrence Loh.
There has been public outcry around the plan to sell a majority stake in the former NTUC Income co-operative to a foreign multinational. But a viable, competitive Income Insurance is in the best interests of Singaporean customers, says NUS Business School's Lawrence Loh.New: You can now listen to articles.It looks like an irresistible deal: Allianz has offered S$40.58 per share for a total transaction value of S$2.2 billion . It’s a 37.
However, the insurance sector has changed significantly especially over the recent years. Competition is relentless and innovation is inevitable to remain viable. NTUC Income as a co-operative had untapped potential before corporatisation. According to Statista, the gross domestic product of the finance and insurance industry in Singapore grew from S$45.97 billion in 2014 to S$74.07 billion in 2021. This represents a growth of 61.1 per cent over the period.
That Allianz bid a hefty premium shows it recognises that Income Insurance can earn more than it currently does. FILE PHOTO: The logo of insurer Allianz SE is seen on the company building in Puteaux at the financial and business district of La Defense near Paris, outside Paris, France, May 14, 2018. REUTERS/Charles Platiau/File photoThe counterargument that has arisen in the public backlash since the announcement is that Income Insurance, as a social enterprise, was never meant to pursue revenue and profit.
If the deal goes through, the new majority owner Allianz cannot afford to lose the faith of the people in Singapore, particularly the workers.
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