Singapore Blocks $1.7 Billion Allianz-Income Insurance Deal

Philip J. Heijmans and Elffie Chew
4 min read

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(Bloomberg) -- The Singapore government will block a proposed S$2.2 billion ($1.7 billion) deal by Allianz SE to buy a majority stake in a homegrown insurance firm, three months after the transaction sparked a public backlash.

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The government decided it wouldn’t be “in the public interest” for the Income Insurance Ltd. deal to proceed in its current form, Minister of Culture, Community and Youth Edwin Tong told parliament on Monday. The city-state isn’t satisfied that Income can fulfill its social mission as a co-operative after the acquisition, he added.

The rare move by Singapore comes as new Prime Minister Lawrence Wong prepares for an election that must be held by November 2025. Wong said in a Facebook post the concerns are over the structure and terms of this deal, particularly in the context of assurances that Income had given to the government when it was corporatized in 2022.

“We are nonetheless open to any new arrangement which Income may wish to pursue, whether with Allianz or any other partners, so long as the concerns highlighted are fully addressed,” Tong said.

Law Amendment

The approval of any revised deal will lie with the country’s financial regulator, which will need to take the views of Tong’s ministry into consideration after the government amends a law to do so. The bill will be debated in parliament later this week.

Allianz said it’s convinced that a deal would “benefit Singapore’s customers and society.”

“We will now work closely with the relevant stakeholders to consider revisions to the proposed transaction structure,” the insurer said in an e-mailed statement.

In July, Allianz said it planned to buy at least 51% of Income from NTUC Enterprise Co-operative Ltd. which would elevate the German company to fourth spot among composite insurers in Asia, up from 9th. The deal ignited criticism after it was announced, with many in Singapore complaining how it could lead to higher insurance premiums and betrays Income’s roots to help middle to lower-income Singapore workers.

“Singapore’s life insurance market remains attractive,” said Bloomberg Intelligence analyst Steven Lam. “The question becomes will Allianz think of any alternative in Singapore or will it divert the firepower to other existing operations in Asia?”

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