About the corporatisation exercise
1. Why embark on a corporatisation exercise now?
- Over the years, Income’s operating environment has undergone significant shifts. These include a mature domestic market, evolving regulatory expectations and requirements, as well as increased competition from insurers with extensive distribution scale and access to growth channels and markets locally and regionally. The latter is further compounded by technology players entering the insurance sector and playing to customers’ increasing demand for more diverse and targeted products and solutions that are embedded in their digital-first lifestyles.
- While Income has been agile in responding to these market shifts, it is looking to the proposed corporatisation exercise to achieve operational flexibility and access more strategic growth options to compete on an equal footing with other insurers in the market.
- In turn, Income will be better placed to address not only current market shifts, but also future challenges to ensure long-term growth and its ability to serve customers better.
2. Is corporatisation the best option to support Income’s growth plans?
- As a corporate entity, Income will have more operational flexibility and strategic growth options to ensure its long-term growth and ability to serve customers better.
- Thus, the corporatisation exercise demonstrates Income’s foresight to be future-ready as it will be better placed to compete on an equal footing with other insurers in an evolving and increasingly challenging landscape.
3. What are the benefits of corporatisation?
- Income will have more operational flexibility and strategic growth options as a corporate entity to scale its business and achieve competitive advantage to serve its customers and society better.
- Income can also look to enhance its commitment to social innovation and causes given a stronger and more sustainable business and growth trajectory. Income will be committing $100 million over 10 years in support of sustainability causes that champion the low-income including education for youths and children in need, the elderly, and the environment.
4. When will the corporatisation exercise complete?
- The corporatisation exercise is expected to be completed by the second half of 2022, subject to regulatory approval and other customary closing conditions.
5. Will Income continue to offer affordable insurance products post corporatisation?
- Income is committed to its purpose to empower all Singaporeans to improve their financial well-being, including those who are underserved in Singapore and will continue to explore ways to serve customers better. This purpose will remain a beacon for the new company.
6. Will Income’s business and growth plans change post corporatisation?
- The corporatisation exercise is aimed at accelerating Income’s business and growth plans. The exercise only changes Income’s legal form from a co-operative to a corporate entity and will not affect the business operationally.
7. Will Income’s organisation structure be affected post corporatisation?
- Corporatisation changes only the legal form of Income. All existing assets and liabilities will be transferred to the new company via a ‘Scheme of Transfer’ under the Insurance Act and other agreements entered into between Income and the new company. The name of the new corporate entity governed by the Companies Act is Income Insurance Limited. The new company will continue to hold the same shareholding in subsidiaries that were previously held by the co-operative.
- As part of the corporatisation exercise, NTUC Income Insurance Co-operative Limited will be liquidated in the second half of 2022.
- NTUC Enterprise Co-operative Limited will remain the majority shareholder of the new company.
8. What is the transaction process of the corporatisation exercise?
- As part of the proposed corporatisation exercise, NTUC Income Insurance Co-operative Limited (co-op) has incorporated a wholly-owned new company (NewCo). The name of the NewCo is Income Insurance Limited.
- All existing assets and liabilities of the co-op will be transferred to the NewCo via a ‘Scheme of Transfer’ under the Insurance Act and other agreements entered into between the co-op and NewCo.
- A notice of intention will be published in the press to inform institutional and ordinary members of the co-op about the transfer of the insurance business by the co-op to the NewCo.
- Upon completion of the transfer of the insurance business by the co-op to the NewCo, the co-op will be liquidated and shares in the NewCo held by the co-op will be distributed to co-op shareholders according to the number of co-op shares that they hold on a one-for-one basis. As such, co-op shareholders who hold co-op shares will hold shares of the NewCo and become its shareholders. E.g. if a shareholder holds 100 shares in co-op today, the shareholder will receive 100 shares in the NewCo post corporatisation.
- The NewCo will be the new insurance operating entity post corporatisation.
9. How can I find out more about the corporatisation exercise?
- For more information, please refer to https://www.income.com.sg/corporatisation. Income’s experienced customer service team remains unchanged. They can be contacted at +65 6788 1777 (8:30am to 6:30pm, Mondays to Fridays, excluding Public Holidays).
