NTUC Enterprise Co-operative Ltd issued an updated statement on Tuesday (30 July) addressing the public outcry and concerns over the impending sale of a majority stake in Income Insurance — formerly NTUC Income — to German insurer Allianz.

Allianz had earlier expressed its intent on 17 July to acquire 51% of Income’s shares, valued at S$2.2 billion which sparked significant backlash from the public and experts. Prominent figures, including former NTUC Income CEO Mr Tan Suee Chieh and Ambassador-At-Large Dr Tommy Koh, have voiced their opposition.

They argue that the sale contradicts the commitments made during the corporatisation of NTUC Income in 2022, where it was promised that NTUC Enterprise would remain the majority shareholder. Currently, NTUC Enterprise holds 72.8% of the shares in Income.

Experts have noted that Singaporeans have a historical attachment to Income, viewing it as a co-operative committed to providing affordable insurance to underserved workers. There is concern that Allianz, as a profit-driven multinational, may not fully align with Income’s original mission.

Competitive Landscape and Growth Challenges

NTUC Enterprise in its statement, emphasized that the competitive landscape in Singapore’s insurance market has drastically changed, with more than 40 global, regional, and local insurers vying for growth.

Despite aggressive bids, Income has lost several key contracts, highlighting the necessity for robust and continuous capital support to thrive.

“A social enterprise model alone cannot shoulder growth in Singapore’s competitive insurance environment,” the statement read.

NTUC Enterprise believes that the partnership with Allianz will enable Income to leverage global expertise in asset management, technology, product development, and distribution, thus enhancing its competitive edge.

NTUC Enterprise’s Historical Stewardship

To address these concerns, NTUC Enterprise provided examples of its stewardship over the years.

In 2012, NTUC Enterprise issued a letter of responsibility to the Monetary Authority of Singapore (MAS) to ensure Income Insurance’s liquidity and financial stability. It also converted its shares to irredeemable ones to strengthen the capital adequacy ratio.

During economic downturns, NTUC Enterprise injected approximately S$630 million into Income  to maintain its financial health. This included a crucial S$100 million injection during the COVID-19 pandemic.

Supporting the corporatisation of Income in 2022 was part of NTUC Enterprise’s strategy to provide greater flexibility and strengthen long-term competitiveness. The corporatisation allowed Income to explore strategic options, such as mergers and acquisitions, to support its growth.

As to promise that NTUC Enterprise would remain a majority shareholder, it stated that there were no material developments at the time, and hence, it would have been misleading to say anything more than the fact that NTUC Enterprise would remain a majority shareholder, subject to the interests of Income.

Commitment to Social Objectives

NTUC Enterprise Chairman, Mr Lim Boon Heng, reiterated the company’s commitment to protecting families financially against key risks.

He acknowledged that while the landscape has changed, the social objective remains unchanged. NTUC Enterprise will continue to be a substantial shareholder, guiding Income towards achieving its social outcomes.

Mr Lim noted that the co-operative model is no longer effective for Income’s competitive ambitions and growth plans.

However, he emphasized that NTUC Enterprise intends for Income to remain financially sustainable and socially responsible, in line with its purpose of empowering financial well-being for all.

Future Vision with Allianz

NTUC Enterprise says that it believes that the partnership with Allianz is in the best interests of policyholders and shareholders.

The combination of Income’s strengths and Allianz’s global capabilities is expected to create a highly competitive composite insurer in Singapore. Allianz’s financial strength, technical expertise, and asset management capabilities will underpin the value of policies and support future growth.

Mr Lim highlighted that social enterprises and co-operatives are no longer unique in doing good, as more businesses embrace stakeholder capitalism. He expressed confidence that the Allianz-Income partnership would open exciting opportunities and enhance the long-term competitiveness of Income.

He said, “Going forward, Income Insurance will be backed by not one, but two institutional shareholders, NTUC Enterprise will remain a substantial shareholder to provide direction towards the social outcomes, in line with the principle doing well and doing good.”

Public Backlash to NTUC Enterprise’s Statement

Following NTUC Enterprise’s statement regarding the sale of a majority stake in Income to Allianz, netizens expressed strong opposition and skepticism on Channel News Asia’s Facebook page.

One user commented, “This is not an excuse to sacrifice national interest.”

Another added, “Instead of being resilient in the face of failures and building the grit to be competitive, NTUC Enterprise throws in the towel? Is this how we teach our next generations of Singaporeans? How about our future leaders, are they going to give up leading corporations and the country in this volatile world? Is this the Singapore dream we are building or the beginning of Singapore nightmares? We cannot just stand at NDP every year, sing songs, act patriotic, but then act otherwise.”

A third commenter questioned, “Why sell 51% and claim to still have the heart to ensure the new merger will continue to emphasize social causes? As a minority shareholder, what makes you think you can influence decisions when Allianz changes direction in the future? This seems more like a deal for shareholders to unload their shares and leave.”

Another user sarcastically remarked, “I get it. They can’t grow on their own and must sell 51% to ‘grow.’ Perhaps they reached an agreement. So their predecessors did a good job then. These current ones can’t grow without foreign intervention. Why are we paying them so much for a simpler job? Their predecessors did much better with less.”

One commenter criticized, “I feel this eagerness to sell to Allianz demonstrates a lack of imagination and ingenuity by NTUC leaders. NTUC Income not competitive? Just sell it and make it somebody else’s problem!”

Another wrote, “Profits from NTUC social enterprises likely go to defray the cost of running NTUC. It’s expensive to fund a large number of employees and labor MPs based solely on member subscriptions. There are many mouths to feed at NTUC, hence not competitive enough when bidding for contracts.”

A user harshly commented, “So they finally admit they are selling due to their incompetence. One can imagine if these public servants weren’t backed by our reserves (taxpayers’ hard-earned money), all our national assets would have gone bankrupt by now.”

Finally, another comment read, “NTUC Income was set up to provide affordable insurance to workers and the lower income group. Why compete with profit-making companies? Now NTUC Income’s focus is to make more money, benefiting CEOs, COOs, directors with million-dollar compensations, moving away from the social enterprise label.”

The backlash underscores significant public concern and skepticism about the proposed sale and its implications for NTUC Income’s mission and values.