Public backlash blocks Income-Allianz merger

The failed merger between Singapore’s Income Insurance and Allianz showed that companies should not solely base their financial decisions on the bottom line; public sentiment is just as important.

“I think players will need to be quite mindful,” Lawrence Loh, a professor at the Department of Strategy and Policy of NUS Business School, told Insurance Asia. “They have to fundamentally cater to the interest of all stakeholders, beyond just shareholders, and [beyond] the financial value viewpoint.”

The Singapore government in October rejected a bid by German insurer Allianz to buy a majority stake in Income Insurance, but said it remained open to a new deal if its concerns could be addressed.

Along with the rejection, Singapore’s Parliament passed a bill to amend the Insurance Act, paving the way for the Monetary Authority of Singapore (MAS) to consider the views of the Ministry of Culture, Community and Youth when an application for regulatory approval involves an insurer that is either a cooperative or linked to one.