Singapore Income Insurance’s deal with Allianz raises fears of profit over social mission
- Critics such as diplomat Tommy Koh say Income Insurance’s key role is to serve Singaporeans by keeping premiums affordable
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.”
