Former NTUC Income CEO criticizes sale to Allianz, citing broken promises and threats to social mission

In a sharply worded commentary published on Channel News Asia, former NTUC Income CEO Tan Suee Chieh expressed strong opposition to the proposed sale of a 51% stake in Income Insurance to German insurer Allianz, describing it as a betrayal of the social mission that has guided the company since its inception.

Tan served as the CEO of NTUC Income between 2007 and 2013 and was the former Group CEO of NTUC Enterprise between 2013 and 2017.

In his piece, Tan highlighted that the sale, which comes just two years after NTUC Income’s corporatisation, directly contradicts the assurances given in 2022.

At that time, NTUC Income transitioned from a co-operative to a corporation, with promises that NTUC Enterprise would remain the majority shareholder and that the company’s mission and values would remain intact.

“There is no investment to improve Income Insurance’s capabilities, regional or technological – something emphasized in 2022,” Tan wrote. “Instead, the deal appears to be a mechanism for NTUC Enterprise and other shareholders to cash out with substantial gains.”

Tan pointed out that the assurance given in 2022, which was communicated to him in writing by the Independent Directors of NTUC Income, has been breached in less than two years.

“With these as a backdrop, it is hard to regard any further commitments made seriously,” he noted.

Contrasting Ethos and Culture

Tan expressed concern that the sale to Allianz would undermine the core values and identity of Income Insurance.

“The prospect of a foreign entity owning a majority stake in Income Insurance is unsettling, considering the deep emotional ties Singaporeans have with NTUC Income and its spirit and values as a co-operative,” he said.

He emphasized that Income Insurance could lose its “People before Profits” philosophy under Allianz’s profit-driven ethos.

Allianz CEO Oliver Bäte’s recent statements about wanting to “build a resoundingly profitable business” and focusing on shareholder value were cited by Tan as stark contrasts to NTUC Income’s historical mission of maximizing social impact rather than profits.

A Viable Social Enterprise Model

Tan argued that it is not necessary for socially motivated businesses to be part of a multinational group to succeed. He highlighted NTUC Income’s superior cost efficiency compared to multinationals operating in Singapore and pointed out that many successful single-country co-operatives exist worldwide.

“If Income Insurance remains an independent social enterprise, there has to be a fundamental review of its product suites, if capital requirements are such a concern,” Tan suggested.

He emphasized that access to Allianz’s asset management capabilities could be obtained without selling the company.

What Singaporeans Need

Tan underscored the need for a diversity of business models in Singapore’s financial services industry, advocating for companies focused on customer value rather than shareholder profits. He stressed that Income Insurance should concentrate on transparent, value-for-money health, term, and personal insurance products, which are essential for Singaporeans.

“Income Insurance can be a force for good in price moderation for these essential products, and a standard bearer in customer experience, transparency, and fairness in claims settlement,” Tan wrote.

He noted that many heartlanders prefer dealing with Income Insurance due to trust and emotional resonance.

Call to Preserve the Social Mission

Tan concluded his commentary by calling for the preservation of Income Insurance’s social mission and values. He emphasized the importance of protecting the interests of all stakeholders and honoring the commitments made during the capital injection from NTUC Enterprise and the 2022 corporatisation.

“Income Insurance must remain dedicated to serving the people of Singapore and not the shareholders of Allianz Europe BV, putting people before profits – not the other way round,” Tan asserted.