We refer to the letters by Forum writers Lee Yim May (Will new company keep NTUC Income’s social mission?) and Leong Ming Soon (Being a co-op is what made NTUC Income special) published on Jan 10.
We would like to clarify that although Income was established as a cooperative in 1970 to provide essential insurance to underserved workers in Singapore, it is neither not-for-profit nor non-profit. We must first be a thriving and sustainable enterprise before we can fulfil our social commitments.
The corporatisation exercise changes only Income’s legal form from a cooperative to a non-listed corporate entity. The new entity will remain an NTUC social enterprise. NTUC Enterprise will continue to be the majority shareholder of the new entity.
Our NTUC lineage will ensure that we stay true to our purpose to improve the financial well-being of Singaporeans via affordable and quality insurance solutions, including those who are underserved.
We have committed $100 million over 10 years to support the low-income, including education for children and young people in need, the elderly and the environment.
As Singapore’s domestic insurance market matures, we must identify new growth avenues beyond Singapore, especially when insurers are consolidating to boost their competitive edge and market share in Singapore and regionally. Thus, Income’s expansion overseas is a strategic move that enables us to compete on an equal footing with other insurers, drive long-term growth and better serve Singaporeans.
With corporatisation, some are concerned that shareholders may stand to gain at the expense of policyholders. This is not true.
The benefits to policyholders in the form of bonus declaration on participating life policies, and shareholder benefits in the form of dividends, are two separate matters. The former is part of our fiduciary duty and is strictly guided by regulations while the latter is a function of our financial performance. The corporatisation exercise also does not change policyholders’ existing policy terms, coverage and benefits.
We remain committed to safeguarding the interests of all stakeholders.
We believe that corporatisation will empower us to drive greater social and economic value in a sustainable manner, and a thriving Income can only be a good outcome for all stakeholders.
Chief Executive Officer