Income Insurance defends failed Allianz deal as capital boost

Chariman Ong also announced his decision to step down after seven years.

Income Insurance said in its latest Annual General Meeting that its now failed acquisition plan by Allianz was necessary for the Singaporean insurer to gain capital flexibility and compete in a crowded insurance market.

The cooperative model, Chairman Ronald Ong explained, limited the company’s ability to raise equity, as shares from most members could not be counted toward Tier-1 capital.

Only NTUC Enterprise (NE), the sole permanent shareholder, could contribute equity capital under regulatory requirements.

Since 2020, NE injected US$78m (S$100m) and had US$234m (S$300m) in standby capital, whilst Income also issued US$624m (S$800m) in subordinated bonds to support solvency during the pandemic.

The chairman said corporatisation in 2022 allowed Income to pursue growth options, including new partnerships.

One such effort was Allianz’s offer to acquire shares at US$31.65 (S$40.58) each. This would have allowed minority shareholders to unlock liquidity, a request Ong said had been “persistent and increasingly urgent.”

The offer was structured to prioritise minority shareholders before NE would tender shares to meet Allianz’s 51% ownership target.

However, the deal was withdrawn in December 2024 following concerns raised by the Ministry of Culture, Community and Youth (MCCY) about the potential dilution of Income’s social mission.

Ong stressed that Allianz’s proposed capital optimisation was not guaranteed and would have required multiple regulatory and shareholder approvals.

He also cited MAS’ view that Income would remain well-capitalised under the plan.

Ong addressed speculation around the US$1.56b (S$2b) surplus carried over from the co-operative, explaining that it was retained with government approval to ensure the company’s solvency post-conversion.

Without it, he said, Income could not have continued operations.

Concluding the AGM, Ong announced his decision to step down after seven years, nominating lead independent director Joy Tan as his successor, subject to re-election and regulatory approvals.

(US$1.00 = S$0.78)