Allianz’s acquisition of a majority stake in Singapore’s Income Insurance is unlikely to disrupt the local insurance market, according to Fitch Ratings.
Allianz’s plan to acquire a 51% stake in Income Insurance for approximately $1.6 billion is set to make it the largest property and casualty insurer in Singapore. However, Fitch Ratings predicts that the deal will not significantly alter the competitive landscape of the insurance market in the city-state.
This acquisition is expected to reinforce Income Insurance’s leading position within the non-life insurance sector. Meanwhile, the life insurance sector will remain predominantly controlled by the top five insurers, including Great Eastern Life Assurance Company Limited and other major global insurance groups.
The acquisition, announced on July 17, may also prompt a rebranding of Income Insurance. Under the terms of the deal, NTUC Enterprise Co-operative Ltd will retain between 21.8% and 49% of the shares, contingent upon acceptance from other shareholders. Income Insurance, a prominent player in Singapore with a history spanning over 50 years, is poised to benefit from Allianz’s extensive global expertise and potential operational synergies.
The acquisition is set to elevate Allianz to the position of the largest property and casualty insurer and the fifth-largest life insurer in Singapore.
Fitch Ratings noted, “We anticipate that this acquisition will enhance Allianz’s foothold in Asia—a region strategically important for the group’s expansion—and propel it from the ninth to the fourth-largest composite insurer by insurance revenue in Asia. The move aligns with Allianz’s strategic aim to expand inorganically in the non-life sector rather than the life insurance segment and to solidify its leadership in key markets.”
Singapore’s insurance sector remains attractive to foreign insurers, buoyed by robust economic fundamentals, a solid regulatory environment, and a prosperous population, making it a prime target for mergers and acquisitions.
