Tan Suee Chieh: Income’s mission is to serve Singaporeans, not Allianz shareholders

SINGAPORE: In the latest statement regarding the potential sale of Income Insurance (formerly NTUC Income) to German insurer Allianz, former NTUC Income CEO Tan Suee Chieh reiterated the importance of honouring the organization’s core principle of “people before profits.” He warned against compromising this principle through the sale.

Mr Tan emphasized the need to uphold past commitments, questioning how Singaporeans can trust new commitments made by NTUC Enterprise Co-operative if those made two years ago, when it held over 70% of the shares, are not fulfilled.

In a Facebook post on Wednesday (31 July), Tan outlined 10 key points about the proposed sale, expressing concerns related to the cooperative’s core values, market challenges, and alternative solutions for ensuring the sustainability of Income’s business.

Mr Tan calls for more imagination and courage in exploring alternatives to selling NTUC Income

He suggested that Income Insurance can thrive as an independent, socially impactful enterprise in Singapore without needing to sell to Allianz, calling for more imagination and courage in exploring alternative possibilities.

Tan argued that Income’s life savings insurance business, which requires significant capital, is less aligned with its social mission. He proposed that this segment might be better suited to ETFs and mutual funds.

While NTUC Enterprise’s recent statement highlighted the growing competitiveness in Singapore’s insurance market, Mr Tan suggested avoiding bancassurance deals, which he viewed as high-cost distribution strategies that do not align with the social mission.

He believed that chasing market share for its own sake is inappropriate for a social enterprise.

Despite Income possibly not being the cheapest or offering the best deals in Dependents’ Protection Scheme (DPS) or group schemes, Tan welcomed this, stating, “Our role as a price moderator has been fulfilled, and our focus should now shift to other areas where we can make a significant impact.”

“Expertise can be accessed through other channels without selling Income”

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

However, Tan disagreed, describing this notion as “overstated.”

He argued that access to expertise can be obtained through other means such as reinsurance, consulting firms, and mutuals in Europe, without the need to sell the organization.

“We do not need to sell our heritage to gain access to such expertise.”

Mr Tan further criticized the deal for failing to provide additional capital resources to Income and accused NTUC Enterprise of using the social mission argument insincerely.

He argued that the sale prioritizes capital extraction over Income’s social mission.

He also believed that Income has sufficient capital to excel in various insurance segments and should focus on reinventing itself to better serve Singaporeans.

Mr Tan reiterated that commitments made during NTUC Enterprise’s capital injections in 2015, 2017, 2020, and corporatization in 2022 must be honoured.

“It reflects the integrity of the organization and influences how seriously future commitments will be regarded. ”

“If commitments made two years ago as a 70% shareholder are not kept, how can we trust new commitments made as a minority shareholder?”

Tan stressed that Income’s primary role is to serve the people of Singapore, not the shareholders of Allianz Europe BV.

He reminded NTUC Enterprise’s top leaders that Income’s fundamental principle is “people before profits” and warned against compromising this principle by selling the organization.

Prof Tommy Koh challenges Lim Boon Heng’s justification for selling majority stake in Income

On Wednesday, in a Facebook post, Ambassador-At-Large Professor Tommy Koh publicly disagreed with and challenged the rationale provided by Mr Lim Boon Heng, chairman of NTUC Enterprise, for selling a majority stake in Income.

Resonating with Mr. Tan’s sentiments, Professor Koh emphasized Income’s founding mission, recalling that it was established as a cooperative by the legendary Dr Goh Keng Swee to make insurance accessible and affordable for ordinary Singaporeans.

“For the past 54 years, it has fulfilled its mission and looked after the insurance needs of 2 million customers.”

Prof Koh highlighted several key initiatives by Income, including the Family Micro-Insurance and Savings Scheme for low-income families and insurance coverage for children with autism.

He questioned whether a foreign company would have launched such socially responsible products, expressing concern that these initiatives might not continue under Allianz’s ownership.

Addressing the financial health of Income, Prof Koh pointed out that it has always been profitable, posing the question: “In view of this fact why does NTUC Enterprise wish to sell INCOME? Is it because it will make a profit of $1 billion?”

He concluded with a reflection on changing values in Singapore, citing the warning by Singapore’s first foreign minister, S Rajaratnam, against becoming “a nation of people who know the price of everything but the value of nothing.”