The Monetary Authority of Singapore (MAS) has responded to concerns regarding Allianz‘s proposed acquisition of a majority stake in Income Insurance.
The Singapore regulator emphasised that the S$2.2bn (around $1.6bn) deal is not expected to hinder competition within the insurance sector.
Go deeper with GlobalData
Allianz, a European insurance giant, intends to purchase at least 51% of Income Insurance from NTUC Enterprise Co-operative, aiming to bolster its footprint in Asia.
According to Bloomberg, the transaction has sparked significant debate since its announcement, drawing comments from figures such as Singaporean diplomat Tommy Koh and former Income Insurance and NTUC Enterprise CEO Tan Suee Chieh.
Addressing the Singapore parliament, MAS board member Chee Hong Tat stated that maintaining a competitive insurance market with robust financial players is crucial to MAS’ strategy for a sustainable industry that serves the public effectively.
He assured that Allianz would be held accountable for its commitments post-acquisition.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAllianz Insurance Singapore currently holds a modest position in the retail and small and medium-sized enterprise insurance market, occupying the 14th rank in general insurance with a 2% market share based on written premiums, Tat said.
He noted that there is minimal overlap between the businesses of Income and Allianz in Singapore, mitigating concerns over the deal’s impact on market competition.
Tat added that the insurance landscape in Singapore is notably competitive, with more than 50 direct insurers providing a diverse array of products for individuals and businesses.
Income Insurance, established in 1970 as a cooperative society, is one of Singapore’s four systemically important insurers, serving around 1.7 million customers with life, health and general insurance offerings.
Despite Income’s market shares being under 10% for life and general insurance, it is not always the most cost-effective option, MAS board member said.
NTUC Enterprise, with interests spanning food, health and education sectors, held a 72.8% stake in Income Insurance as of the end of 2023.
Subject to regulatory clearance, the acquisition is due for completion by the first quarter of the following year.
Critics of the deal argue that it allows NTUC Enterprise and other stakeholders to realise significant financial returns.
In a Facebook post on 30 July, Koh, Singapore’s former permanent representative to the UN, said: “I feel sad that for many younger Singaporeans nothing is sacred and everything is for sale.”
Meanwhile, Chieh acknowledged the important role played by cooperatives like Income Insurance, but noted that the insurer’s capital reserves have been strained due to increased competition.
“The best way to keep prices affordable is to facilitate competition, ensure options for customers and put in place a sound regulatory framework,” Chieh added.
