Prof Tommy Koh reiterates opposition to sale of Income Insurance to Allianz

Professor Tommy Koh, Ambassador-At-Large at the Ministry of Foreign Affairs and Chairman of the Institute of Policy Studies, has once again voiced his opposition to the proposed sale of Income Insurance to the German multinational corporation Allianz.

Allianz announced on 17 July that it planned to buy a majority stake in Income Insurance for about US$1.6 billion. Allianz offered S$40.58 per share, valuing the transaction at S$2.2 billion (US$1.66 billion) for a 51% stake in Income Insurance. NTUC Enterprise currently holds a 72.8% stake in Income and will become a minority shareholder after the sale.

NTUC Income, established in 1970, was created to provide insurance protection to the masses at a time when life insurance was primarily accessible only to the higher income group. The cooperative insurance company was later converted to a private company in 2022.

In a Facebook post on Tuesday, Prof Koh expressed his support for Tan Suee Chieh, former CEO of NTUC Income, who has been critical of the transaction.

“I have followed the exchange of views between Tan Suee Chieh, the former CEO of NTUC Income and NTUC Enterprise, and NTUC Enterprise and Income Insurance. I support the views of Tan Suee Chieh and hope that the Singapore Parliament will do the right thing when it discusses the matter this afternoon. INCOME is the people’s insurance company. It should not be sold and certainly not to a foreign company. It is part of our social compact,” Prof Koh wrote.

This follows Prof Koh’s earlier post on 23 July, where he highlighted the origins of NTUC Income, stating, “INCOME started life as a cooperative of NTUC like Fairprice. The idea was to offer insurance to the people at affordable rates. A few years ago, it was made into a company and ceased to be a cooperative. Now we are told that it may be sold to a German insurance company.”

Prof Koh further emphasized the social mission of NTUC Income, saying, “I don’t think it’s a good idea to sell INCOME. It was founded to serve a social purpose and a social need. They remain valid today. I wish to argue that INCOME and Fairprice should never be sold.”

Public Reactions on Facebook

Prof Koh’s comments received widespread support on social media, with many echoing his concerns about the sale’s impact on Income Insurance’s social mission and minority shareholders.

One commenter agreed, stating, “Even if NTUC pledges to hold Income to the commitment of keeping two existing low-cost insurance schemes affordable, what about the other insurance schemes that the common people had bought? Also, how does a lesser shareholder like NTUC Enterprise hold Allianz to the commitment? It’s also sad to see the mainstream media plastering NTUC’s POV all over the place and giving the alternate views little attention.”

Another commenter questioned the effectiveness of such pledges, writing, “Prof Koh, if both you and Mr Tan who are influential leaders in your own fields cannot convince them, will they even hear the feedback and concerns from ordinary citizens like us? This is a good example of how tone deaf some people are. Pledges are not legally binding. Even if Allianz honors the pledge to continue the social responsibility of Income, what assurance is there if Allianz sells Income to another commercial business in years to come? Will the next major shareholder honor this pledge? I doubt.”

Additional comments on Prof Koh’s Facebook post included concerns about the misuse of public reserves and the perceived lack of capability within NTUC Enterprise and Income’s management to elevate the company’s status without resorting to a sale.

Former NTUC Income CEO Tan Suee Chieh has been vocal about his opposition to the proposed sale, urging the Monetary Authority of Singapore (MAS) to scrutinize the deal thoroughly.

In his recent open letter, Mr Tan raised concerns about the dilution of minority shareholders’ stakes due to NTUC Enterprise’s capital injections at par value and the potential erosion of Income Insurance’s social mission under Allianz’s ownership.

Mr Tan’s letter highlighted that NTUC Enterprise increased its shareholding in NTUC Income from 30% to 70% by acquiring shares at a significant discount, which diluted the stakes of ordinary members. He also questioned Allianz’s commitment to maintaining NTUC Income’s founding principles and social responsibilities.

NTUC Enterprise and Income Insurance’s Response

In response to Mr Tan’s criticisms and concerns, NTUC Enterprise and Income Insurance issued a joint statement emphasizing the necessity of capital injections to support NTUC Income’s financial stability and regulatory compliance.

They assured stakeholders that Allianz, as a majority shareholder, would continue NTUC Income’s social initiatives and that the transaction would benefit minority shareholders through substantial returns on their investments—even though Allianz does not seem to have made any written commitment.

Mr Tan had previously quoted Allianz Group CEO Oliver Bäte, who stated in a Business Times article, “We’re not in Asia to buy top line; we want to build a resoundingly profitable business.”