SINGAPORE: In a latest argument against selling Singapore’s corporate NTUC Income to German insurer Allianz, Mr Tan Suee Chieh, former CEO of NTUC Income, has reiterated his objections to the justifications provided by NTUC Enterprise and Income. He argued that these justifications are unconvincing.
Mr Tan emphasised his support for seeking an institution that aligns with Singapore’s strategic interests to purchase the shares, rather than Allianz, which he believed prioritizes shareholder returns over the social mission of NTUC Income.
He highlighted that while innovation and adaptation are crucial, it is essential to do so in a manner that preserves the social mission and adheres to the cooperative principles that have guided Income since its inception.
“Sacrificing these values for short- term gains or aligning with entities that do not share our ethos would not only constrain our future but also undermine the very foundation upon which Income was built. ”
In a statement posted on his Facebook page on Wednesday (28 August), Mr Tan reiterated his criticism of NTUC Enterprise for failing to honour previous commitments made during capital injections. These commitments included maintaining the permanence of issued shares, safeguarding Income’s social mission, and ensuring that Income retained a majority shareholding.
One of Tan’s primary concerns is the potential extraction of surplus capital from Income post-sale.
He questioned whether Allianz, given its focus on return on investment (ROI), will extract surplus capital from Income, which could ironically contradict the sale’s justification centered on the need for more capital.
Tan noted that the participating life business segment, which is long tail and capital-intensive, might be phased out if it does not align with Allianz’s ROI objectives.
He argued that the participating life business, while requiring substantial capital, is less mission-critical compared to other segments where Income has a significant market share.
He suggested that Income should pivot towards these mission-critical areas and focus on delivering social impact.
Mr Tan: NTUC Income Should Reinvent Itself to Leverage Existing Strengths for Greater Social Impact
Besides market share in life insurance as 10%, Mr Tan further highlighted Income’s significant market shares in other important sectors, including:
- 27.5% in motor insurance
- 22% in health insurance (Income Shield)
- 21% in travel insurance
- 17% in personal accident insurance
Mr Tan argued that instead of selling to a foreign insurer, Income should “reinvent itself,” and use its enviable existing strengths to deliver social impact and outstanding value to Singaporeans.
Mr Tan further pointed out that the company’s track record in retail insurance in Asia is not exceptional.
He questioned whether Allianz’s expertise is truly indispensable in the regional context and highlights its profit-driven goals, which may not align with Income’s social mission.
While NTUC Enterprise Chairman Lim Boon Heng asserted that there is a shared purpose between Allianz and Income in serving people well, Mr Tan pointed to a seemingly contradictory statement from Allianz CEO Oliver Bate.
Bate, during the company’s second-quarter earnings briefing in Frankfurt on 8 August, affirmed that Allianz expects a “double-digit return on investment (ROI) over time” from its acquisition of Income Insurance.
Tan also draws attention to the success of other cooperatives and social enterprises globally, which have thrived without needing to expand regionally or be acquired by listed companies.
He also expressed support for finding an institution aligned with Singapore’s strategic interests to purchase the shares, rather than Allianz, which he sees as prioritizing shareholder returns over social mission.
Mr Tan Decries NTUC’s Shift Towards Shareholder Returns, Calls for Better Use of Income’s Strengths
Mr Tan found it deeply ironic and troubling that NTUC, an institution traditionally associated with cooperative principles and social missions, is now leading a shift towards aligning with a multinational company focused on maximizing shareholder returns.
“While it is true that the funds raised from this sale could potentially be redirected by NTUC Enterprise to support other social good initiatives, this is not the right way to leverage Income.”
“Sacrificing the cooperative’s core mission undermines the very essence of what Income stands for.”
Mr Tan also expressed his strong support for a diversity of business models and a pluralism of choices.
“Such diversity is not just a matter of principle; it is essential for building a more resilient and inclusive Singaporean society, where institutions like Income continue to play a pivotal role in serving all Singaporeans, especially the workers that NTUC represents.”