Tan Suee Chieh supports call for Temasek to assume role as strategic investor for Income

SINGAPORE: Mr Tan Suee Chieh, former CEO of NTUC Income, supported the idea that Temasek, with its strong commitment to Singapore, should be considered as a strategic investor for NTUC Income instead of the German insurer Allianz.

“It is Singapore-centric and purpose-led,” explained Mr Tan, “Temasek’s T2030 strategy emphasizes a purpose-driven approach, promoting long-term sustainable value, sound corporate governance, and community upliftment. ”

He believed this aligns well with Income’s evolving social mission and Singapore’s national narrative.

Ho Swee Huat: Income is not “just any private body”

In a Facebook post on Thursday (8 August), Mr Tan Suee Chieh shared an unpublished letter to the Straits Times Forum, in which he responded to an opinion piece by Ho Swee Huat, Managing Director of Abacus Assets Advisors Pte Ltd.

Mr Ho questioned NTUC Enterprise Chairman Lim Boon Heng’s assurance that NTUC Enterprise will remain a substantial shareholder, guiding Income towards its social outcomes.

He argued that while Allianz is expected to be a socially responsible corporate citizen, its primary focus on financial returns for shareholders may not align with NTUC Enterprise’s social goals.

He challenged Lim’s view that government intervention should not influence commercial decisions, asserting that Income Insurance is not just “any private body” but plays a crucial role in Singapore’s social compact, warranting consideration beyond purely commercial interests.

Additionally, Mr Ho highlighted the declining market share of Income Insurance and questioned the delay in addressing this issue.

He suggested that, given Allianz’s past performance in the life insurance sector, it may not be the right partner and proposed that Temasek, with its strong commitment to Singapore, should be considered as an alternative.

Tan Suee Chieh: Allianz’s corporate values and goals misaligned with Income’s social mission

In his letter, Mr Tan echoed Mr Ho’s sentiments and added further insights.

He emphasized that NTUC Enterprise had committed to maintaining its $630 million investment in Income to uphold its social mission.

Mr Tan reiterated that NTUC Enterprise should honour this commitment by preserving its majority ownership and safeguarding Income’s social objectives.

He acknowledged that minority shareholders have long sought an exit strategy and suggested that the Allianz deal provides a valuable opportunity for them to exit at a set price. Tan also proposed that an institution with a strong commitment to Singapore, such as Temasek, should consider purchasing these shares.

He noted that Temasek’s commitment to enhancing capabilities that benefit their ecosystem and ensuring their organization is equipped to tackle future challenges speaks to Income’s underlying concerns of access to expertise.

In contrast, he observed that while Allianz is keen to expand its business in Asia, its corporate values and goals do not align with Income’s social mission.

“A solution can be found in rescinding the contract, if both parties are willing.”

Mr Tan in his letter also argued that Singapore does not need another listed insurance company. Instead, having Income Insurance remain a national icon with a strong social impact narrative is more beneficial.

He challenged the notion that Singapore lacks the talent to support a successful social enterprise, and advocated for a shift in how success is defined for social enterprises.

“It does not need to expand internationally, but it must serve Singaporeans well by giving them value for money and customer satisfaction.”

“We have many successful icons in Singapore, Income Insurance, backed by the right institutional holders with Singaporeans’ interests at heart, can be one, ” Mr Tan concluded.

Chee Hong Tat Assures Parliament MAS will hold Income and Allianz accountable for maintaining existing insurance contract terms

During the Parliamentary session on 6 August,  several Members of Parliament (MPs) raised concerns bout the potential Income-Allianz deal. They questioned whether Income might lose its identity as a cooperative and social enterprise and sought clarity on the Monetary Authority of Singapore’s (MAS) regulatory assessment.

Last month, Allianz announced that it was planning to buy a majority stake in Income for S$2.2 billion (US$1.6 billion). The deal is pending MAS approval.

It said it would offer S$40.58 per share for 51 per cent of shares in the company. NTUC Enterprise currently holds a 72.8 percent stake in Income.

Second Finance Minister and MAS board member Chee Hong Tat addressed Parliament, assuring that MAS will hold both Income and Allianz accountable to ensure that no changes are made to the terms and conditions of existing insurance contracts if the deal is approved.

“MAS expects Income to fulfil its obligations to all policyholders under the terms of its existing insurance contracts. Allianz has also publicly stated its intent for Income to do so. MAS will hold Income and Allianz to account to these commitments,” said Mr Chee.

Mr Chee explained that in evaluating the offer, which involves a significant change in shareholders for a Singapore insurer, MAS will consider Allianz’s track record, financial stability, reputation, and overall suitability.

For instance, MAS will assess Allianz’s financial capacity to support Income as needed, and its willingness and ability to ensure effective management of insurance operations. MAS will also evaluate whether Allianz has robust systems and controls to meet long-term obligations to policyholders.

With NTUC’s strong support for the deal and Mr Chee’s position in Parliament, it appears that the deal is likely to move forward.