The German insurance giant looks to solidify its presence in Singapore amid growth potential in Southeast Asia.
Allianz, the German financial services powerhouse, plans to acquire at least 51% of Income Insurance for approximately €1.5 billion (S$2.2 billion), with a share price set at S$40.58, significantly above the previous private trading price of S$19. This acquisition, announced on July 17, will position Allianz as the leading provider in property and casualty insurance and the third-largest in health insurance in Singapore.
Oliver Baete, Allianz’s CEO, stated on August 8 that the company expects a “double-digit return on investment (ROI) over time” from this acquisition. He emphasized the importance of this move in establishing a strong home base in Singapore, where Allianz has been present since 1991 but lacked an operational business until now.
Baete highlighted that this acquisition will propel Allianz from “zero to a leadership position” in Singapore’s insurance market, after selling some of its U.S. insurance businesses. He remarked, “We are recycling the gains out of the U.S. from selling in a sub-scale space to investing into scale in ASEAN.”
Looking forward, Allianz aims to maintain Income’s commitment to affordable insurance and healthcare while improving its market share and profitability, which Baete noted has been declining in recent years. The acquisition is viewed as a partnership, with NTUC Enterprise retaining a 49% stake, ensuring continued involvement in serving the community.
Baete assured that Allianz is dedicated to addressing concerns regarding Income’s social mission of providing affordable insurance for lower-wage workers. The Monetary Authority of Singapore (MAS) will evaluate Allianz’s financial capacity and commitment to upholding Income’s obligations to its policyholders, including maintaining the terms and conditions of existing insurance contracts.
In recent developments, Allianz reported a 7.5% increase in second-quarter net profit, totaling €2.51 billion (S$3.63 billion), surpassing expectations. The company aims for an operating profit between €13.8 billion and €15.8 billion in 2024, signaling strong growth prospects ahead.
