Insurer NTUC Income, set up as a co-operative more than half a century ago, plans to restructure into a corporate entity so that it can have more flexibility to tap different capital sources to fund growth opportunities.
Upon approval of its shareholders and regulators, NTUC Income, set up in 1970 to provide coverage for under-served workers, will become Income Insurance, an entity under the Companies Act. The proposed corporatisation exercise is expected to be completed in the second half of 2022.
“We see corporatisation as a strategic and essential pivot for Income to scale its business quicker locally and regionally, invest in growth channels and markets, as well as digital capabilities to effectively compete more equitably with other insurers,” says chairman Ronald Ong.
“More significantly, we will be even more responsive to changing customer needs via insurance solutions that speak to today’s digital-first lifestyles and customers.”
NTUC Income notes that with more than half a century of operating history, it finds itself in a mature domestic market with evolving regulatory requirements and stiffer competition from other insurers with an extensive distribution scale and access to growth both within and outside Singapore. It faces competition from newer players offering a bigger variety of targeted products “that are embedded in their digital-first lifestyles.”
NTUC Income says it has been “agile” in responding to these changes. With the corporatisation, it can try and gain more operational flexibility and “access to strategic growth options” so that it can compete on an equal footing with other insurers locally and regionally.
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This will build on Income’s recent foray into Indonesia, Malaysia, and Vietnam through strategic local partnerships with leading players in the insurance, broker and insurtech arenas via the Insurance-as-a-Service model.
According to NTUC Income CEO Andrew Yeo, the insurer now has a market share of around 8% on life policies, making it the fifth largest player in this segment, 20% share on new health policies. By policy count, it claims to be the market leader for health and for general insurance, it has a 10% market share.
When asked about a potential listing, Yeo says there’s nothing on the horizon yet. “Like I've mentioned earlier, there is nothing in the horizon. Currently right now what we are focusing on is really just the corporatisation exercise – to position ourselves to be able to have access to more strategic growth plans as well as operational flexibility in future-proofing Income."
