Income Insurance's Future Post Allianz's Withdrawal

Income Insurance could still seek other buyers after German insurer Allianz withdrew its offer to acquire a majority stake, but potential investors may be more cautious, experts suggest.

Allianz's announcement on December 16 follows the Singapore government's intervention to block the proposed deal in October. The initial transaction, announced on July 17, would have seen Allianz holding a 51% stake in Income for S$2.2 billion (US$1.6 billion).

Government Intervention and Public Concerns

The proposed deal sparked public outcry, with concerns over Income's social mission. In response, the government stated that the transaction, in its current form, "would not be in the public interest", but was open to new arrangements if concerns were fully addressed.

Experts' Views on Potential Buyers

Experts believe alternative buyers are still possible for Income. However, these investors must align with Income's long-term vision. The ideal partner should not only provide financial support but also bring expertise, technology, and innovation to modernize operations and ensure sustainable growth in a competitive insurance market, according to Associate Professor Shinichi Kamiya from Nanyang Business School's division of banking and finance.

International firms looking to establish a presence in Singapore's attractive insurance market due to its strong regulatory environment and access to the broader Asian market could be potential partners. Local players like DBS or Temasek may also emerge as alternatives, though their strategic transformation contribution may be "more limited" compared to a global insurer like Allianz, noted Assoc Prof Kamiya.

The Key to Future Success

The critical question is not whether a buyer can be found, but whether Income can secure the right partner capable of driving operational innovation, leveraging artificial intelligence, enhancing product development, and expanding digital capabilities for long-term growth, he added.

Similarly, Professor Lawrence Loh of the National University of Singapore's business school said that Income "should be open" to being acquired as long as its social mission is assured and the S$2 billion in surplus retained during corporatization is safeguarded.

Challenges in Finding the Right Buyer

Finding another buyer who is both willing and able to address the concerns raised in the previous deal will not be straightforward, said assistant professor of economics Goh Jing Rong from the Singapore Management University. The government's intervention and Allianz's retreat highlight the importance of ensuring any future transaction aligns with Income's social mission and cooperative roots, he said.

Such requirements may narrow the pool of interested investors willing to accept these conditions, added Asst Prof Goh. However, this does not preclude the possibility of another acquirer emerging, particularly one with a longer-term outlook or strong alignment with social objectives.