Allianz has announced a pre-conditional voluntary cash general offer to acquire at least 51% of the shares of Income Insurance, subject to regulatory approval.
According to a July 17 announcement, Allianz intends to offer $40.58 per share for a total transaction value of approximately $2.2 billion (approximately EUR 1.5 billion) for 51% of the shares in Income Insurance. The offer price represents a premium over Income's NAV of $29.55 per share of 37.3%.
The Allianz transaction does not mention embedded value, since there are differences between European Embedded Value and Traditional Embedded Value. The Milliman report estimates Income Insurance's embedded value at $4.357 billion for FY2022. Allianz values Income at $4.3 billion.
The proposed transaction will enable Allianz to expand and strengthen its presence in Singapore — an important market for Allianz, given its status as the financial services hub of Southeast Asia.
Allianz is one of the world’s largest global financial services groups. It was founded more than 130 years ago and is present in nearly 70 countries today. Over the years, the Allianz Group has grown to reach an operating profit of EUR14.7 billion in 2023.
Present in Asia since 1910, Allianz has a footprint across nine markets in both Life & Health and Property & Casualty, serving 9 million customers through a network of 80,000 distributors and 35 distribution partners.
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Anusha Thavarajah, regional chief executive officer, Allianz Asia Pacific, says: “We are excited at the prospect of the coming together of Allianz, the #1 global insurance brand, and Income Insurance, Singapore’s trusted and leading insurance brand. Asia holds great strategic importance for Allianz, and we are committed to investing in Singapore by partnering with a well-respected local institution."
NTUC Enterprise Co-operative Ltd will continue to retain a substantial stake in Income Insurance. "By integrating Income Insurance’s capabilities in distribution, partnerships, products, people and Allianz Group’s global and regional resources and expertise, we look forward to taking the insurance landscape of Singapore and Southeast Asia to the next level,” Thavarajah adds.
Allianz intends for Income Insurance to continue participation in national insurance programmes. In addition, Allianz intends for Income Insurance to continue its social commitment and existing pledge of $100 million over 10 years from 2021 to promote social mobility among the low-income, support the well-being of seniors and champion environmental causes.
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The transition for policyholders will be seamless, Allianz says, adding that it will continue to honour the terms of the existing polices underwritten by Income Insurance resulting in no impact to customers. Aliianz's plans include Income Insurance continuing to recognize the labour union, and uphold the principles of good labour-management relations as advocated by the tripartite partners in Singapore.
Leveraging Allianz’s global and regional capabilities, Allianz says it is committed to bringing in the right technology, training, and tools to support the growth of Income Insurance’s distribution channels, the German insurer says.
Adeline Sum, chief executive officer, NTUC Enterprise, says: “Allianz’s expertise as a global leader in insurance can strengthen Income Insurance’s competitive position in Singapore and enable Income Insurance to access its regional scale and networks. Secondly, Allianz’s solid track record as a global leader in asset management can enhance Income Insurance’s investment capabilities for the benefit of policyholders. Thirdly, the strength of Allianz’s financial position will provide additional support to Income Insurance where required.”
“As stated in the Pre-Conditional Offer Announcement, Allianz plans to keep supporting Income Insurance’s continued participation in national insurance programmes and for Income Insurance to continue to recognise the union and uphold the principles of good labour management relations as advocated by the tripartite partners in Singapore. We intend for Income Insurance to continue to be an important financially profitable and socially responsible business, in line with its enduring purpose of empowering financial well-being for all, which strongly aligns with Allianz’s values.”
Thavarajah adds: “As Singapore and the region benefit from advancements in technology and healthcare and continue to grow in affluence, we firmly believe in the pivotal role of insurance in society to protect and grow their financial security and the well-being of our customers and partners."
Follow The Edge Singapore’s coverage of Allianz and Income Insurance:
- May 23: Singapore’s Income Insurance considering partnerships or stake sale
- June 14: Income Insurance and Allianz hold 'transaction' talks, latest possible Singapore insurance M&A
- July 25: NTUC Enterprise says it remains ‘fully committed’ to Income Insurance in clarification statement
- July 30: NTUC Enterprise issues further clarification statement, stresses its commitment to Income Insurance
- Aug 3: Income Insurance: open letter, global backdrop, redeemable and irredeemable shares
- Aug 4: NTUC Enterprise explains the difference between redeemable and irredeemable shares to former CEO
- Aug 5: Former NTUC Income and NTUC Enterprise CEO rebuts NTUC Enterprise’s points
- Aug 6: Income-Allianz deal saga: From a minority shareholder’s perspective
