[Consolidated] Income Insurance, Allianz in talks on tie-up, seeking regulatory approval

[Coaster]

Super scary. Luckily the deal dint went through

but my question is, will it happen again?

My question is: How can it even happen in the first place !!!

 

[Mancunian2]

My question is: How can it even happen in the first place !!!

by putting people without the necessary skills or experience in charge

ng chee meng only knows how to fly aeroplane, they ask him to assess corporate M&A,
outcome is ...................................

 

[Dongbalek]

Existing policy holders should not be worried. Policy contracts are enforceable by law and in history no insurer has ever collapsed. The CAR ratios that MAS stipulates for all life insurers to operate is just too high for them to fail.

Income being 1 of the designated systematically important insurer in Singapore actually has to set aside even more capital to operate. I don't think they will fail.

It is more likely that they will be acquired by another entity and that is where the danger lies. Income has a social mission to provide affordable policies for everyone in Singapore. If they are owned by others, that mission will cease.

Is it for everyone or for union workers only?

 

[Coaster]

by putting people without the necessary skills or experience in charge

ng chee meng only knows how to fly aeroplane, they ask him to assess corporate M&A,
outcome is ...................................

not just necessary skills / experience.

When Singaporeans knows about the actual plan, they were furious. We are experts, but we know it's not good for the company and insurers as well.

How can the people in charge even think of doing such a plan in the first place is my point.

 

[eAtNeAt]

Those who needed to claim under ntuc would know how bad it has become.
Claims are so difficult. Premiums are so high too, one of the highest in the industry.

Actually ntuc income went downhill after it was corporatised some time back. But it was only last year that things came to a head.

How come no one qusstion ncm whether the sale was already in the plan when income was corporatised many years ago.

 

[Carnage]

Is it for everyone or for union workers only?

Technically it is for everyone that is Singaporean or PR.

 

[Carnage]

Those who needed to claim under ntuc would know how bad it has become.
Claims are so difficult. Premiums are so high too, one of the highest in the industry.

Actually ntuc income went downhill after it was corporatised some time back. But it was only last year that things came to a head.

How come no one qusstion ncm whether the sale was already in the plan when income was corporatised many years ago.

That's why NTUC is also No Trouble Until Claim.

 

[Dongbalek]

Technically it is for everyone that is Singaporean or PR.

yes but the pricing differs whether the person is a union member or not an union member. If a singkie is not in the union, the premiums will be similar to those offered by other insurance co

 

[Reborn]

The saga tells me media control can hide something bad to make it sound like it's good. By not mentioning about the 1.85bil capital reduction plan, the public may be misled to think it's the NTUC top management considered carefully and only backs out when the law changed to block it?

how exactly does it work?

Allianz acquire 51% of income shares, at $2.2 billion. Then through the $1.85 billion capital reduction plan which returns capital to shareholders, receive $900+ million? Due to owning 51% of shares? So they would have paid essentially around $1.3 billion? Does it work that way? Asking because I don't know.

 

[Mephist0pheLes]

The saga tells me media control can hide something bad to make it sound like it's good. By not mentioning about the 1.85bil capital reduction plan, the public may be misled to think it's the NTUC top management considered carefully and only backs out when the law changed to block it?

true, in any country with free press, the issue would have been the headline for months. only in sg can such a big oversight be brushed over simply by saying, "sorry, we reviewing the process liao" and can still run for election some more

 

[Carnage]

yes but the pricing differs whether the person is a union member or not an union member. If a singkie is not in the union, the premiums will be similar to those offered by other insurance co

Then just be a NTUC member. You don't have to be part of any union to do that.

 

[lifeafter41]

That’s why I very worried. Existing income policyholders like me will have to bear the consequences while NCM just say SORRY

Got say sorri meh?

 

[Kiwi8]

Actually I’m wondering after the recent saga, will prospects look at NTUC income in a different light and because of this choose to buy other company insurance instead of income…

as a result this perpetuates the reduction of market share of income in our market

If income is not sustainable, what will happen to the income insurance policies we bought?

im seriously quite concerned.

U sure it is still good for Allianz to purchase Income even when it was revealed that Allianz's plan after purchasing Income is to do a capital reduction to be returned to shareholders? U sure it is really to Singapore's benefit when NTUC had also put in public monies (aka tax payers' money) into Income without the corresponding increase in shares?

This means that those public monies would be privatised to be given to shareholders.

 

[mike-q]

Those who needed to claim under ntuc would know how bad it has become.
Claims are so difficult. Premiums are so high too, one of the highest in the industry.

Actually ntuc income went downhill after it was corporatised some time back. But it was only last year that things came to a head.

How come no one qusstion ncm whether the sale was already in the plan when income was corporatised many years ago.

pap policy of profit making

 

[mummynew]

Those who needed to claim under ntuc would know how bad it has become.
Claims are so difficult. Premiums are so high too, one of the highest in the industry.

Actually ntuc income went downhill after it was corporatised some time back. But it was only last year that things came to a head.

How come no one qusstion ncm whether the sale was already in the plan when income was corporatised many years ago.

The intended sale of Income is one of the reasons of I not giving my vote to PAP.

*my nephew's recent ISP claim was very smooth. Those post-hospital claims settled averaged within 7 days. Better than expected.

 

[Reborn]

The intended sale of Income is one of the reasons of I not giving my vote to PAP.

*my nephew's recent ISP claim was very smooth. Those post-hospital claims settled averaged within 7 days. Better than expected.

income policy good or not?

 

[glarerder]

how exactly does it work?

Allianz acquire 51% of income shares, at $2.2 billion. Then through the $1.85 billion capital reduction plan which returns capital to shareholders, receive $900+ million? Due to owning 51% of shares? So they would have paid essentially around $1.3 billion? Does it work that way? Asking because I don't know.

On financial wise, it means Allianz got a discount acquiring income. On the social mission end, there are no law binding safeguards that ensures Allianz continue the social mission so as a for profit organisation, what's stopping them from increasing the premium that could price out people from buying? And most importantly having this media control means news from those media companies are opaque and biased towards achieving its own goals disregarding presenting facts as facts but show half truths instead.

 

[xdivider]

how exactly does it work?

Allianz acquire 51% of income shares, at $2.2 billion. Then through the $1.85 billion capital reduction plan which returns capital to shareholders, receive $900+ million? Due to owning 51% of shares? So they would have paid essentially around $1.3 billion? Does it work that way? Asking because I don't know.

analysis from banker.....

In a series of detailed Facebook posts, Kuan criticised the undisclosed S$2 billion capital reduction, which would have allowed shareholders, primarily NE, to extract funds from Income soon after the transaction. Contrary to popular belief, Kuan argued that Allianz, despite reducing its acquisition cost, was not the real winner in this arrangement.

“There are many comments out there saying Allianz is getting back a heck of a lot of money from the capital reduction and therefore it is the bigger winner,” Kuan wrote. “This is completely wrong.”

Kuan explained that under the deal’s structure, Allianz was set to pay S$2.2 billion for a 51% stake in Income, whose total equity stood at S$3.2 billion as of its last financial statement.

After the acquisition, the $2 billion capital reduction would kick in, with Allianz receiving about $1 billion, which would reduce its total outlay to S$1.2 billion. However, Kuan highlighted the downside: Allianz would end up owning 51% of a significantly smaller entity, with Income’s capital base dropping from S$3.2 billion to just S$1.2 billion.

“In effect, Allianz’s total outlay is S$1.2 billion for a company whose total capital is now just S$1.2 billion, after having S$2 billion extracted from its capital base,” Kuan pointed out. He argued that this left Allianz paying a substantial premium for what would be a much smaller insurer post-acquisition. This revelation flipped the narrative, showing that Allianz was not benefiting as much as it might seem from the capital reduction.

Kuan contrasted Allianz’s position with that of NTUC, which stood to gain significantly from the deal. “NTUC gets S$2.2 billion from Allianz and another S$1 billion from the capital reduction—altogether S$3.2 billion,” he noted.

Kuan underscored that NTUC was the real beneficiary of the deal, extracting value not just from the sale but from the capital extraction as well. He further suggested that this might explain why no other insurers submitted competing bids, with NTUC’s asking price seen as too high by others in the industry.

“This is why IPO [initial public offering] is not an option,” Kuan added. “The German solution is much better for NTUC. With the disclosure of the S$2 billion capital reduction, it now appears the Germans were paying an even bigger premium.”

Kuan criticised NTUC’s eagerness to push the deal through and alluded to potential conflicts of interest, particularly with senior executives possibly having roles in both NTUC and Income.

“You can fully understand why NTUC die die wanna do this deal… the price NTUC is getting is too high,” Kuan commented. He also questioned the appropriateness of such a significant capital reduction in an era of higher capital adequacy requirements for banks and insurers.

Despite Allianz reducing its outlay through the capital extraction, Kuan argued that this didn’t make the German company the ultimate winner. Allianz would be left with a majority stake in a much-reduced Income, whose future capital base would be slashed.

Kuan speculated that NTUC might have been trying to “extract as much as it can possibly get away with” through the capital reduction, leaving Allianz with a diminished company.

 

[Carnage]

income policy good or not?

From my experience, it has been good.

But they do have bad claims experience in the past.

 

[zhiguzai]

From co-operative to corporatization in 2022, Income Insurance have to return the excess funds (beyond par value) to the Co-operative Societies Liquidation Account to benefit the sector generally. As reported by CNA (attached below),

https://www.channelnewsasia.com/com...ce-allianz-deal-withdraw-ntuc-options-4826651

"In blocking the acquisition, the government also revealed that there was a surplus of about S$2 billion at corporatisation that received ministerial exemption to be carried over to the new entity.

The last straw was Allianz’s intent to reduce Income Insurance’s share capital and return some S$1.85 billion in cash to shareholders within three years. This is tantamount to value capture of public money for private gains."

If the deal had go through, the losers will be the policy holders and the state. Knowing existing Income Insurance shareholders intends to cash out, the Government should reshind the wavier and ask Income Insurance to return the excess fund to the Co-operative Societies Liquidation Account.