Global insurer and asset manager Allianz’s proposed acquisition of Singapore’s Income Insurance Limited “should not materially change the competitive landscape in Singapore’s insurance market,” says Fitch Ratings.
If you recall, Allianz Group, through its wholly owned subsidiary Allianz Europe B.V., recently announced its intention to acquire a 51% majority stake in Income Insurance for about USD1.6 billion, which may possibly lead to a name change for the Singapore insurer.
The move is expected to propel Allianz from the ninth to the fourth largest composite insurer in Asia, ultimately strengthening the company’s presence in the region, which has been identified as “strategically important” for the group’s growth.
“Allianz’s ‘AA’/Stable IFS Rating is unaffected, as the proposition transaction is small relative to the group’s operating scale. It is neutral to the group’s capitalisation, company profile and financial performance, all of which we already view as very strong and its key rating strengths,” Fitch added.
As well as this, analysts pointed out that the transaction will result in NTUC Enterprise Co-operative Ltd retaining between 21.8% and 49% of the shares, depending on the acceptance status of other shareholders
In addition, Fitch noted that the transaction is expected to further strengthen Income Insurance’s position in the fragmented non-life sector.
“The transaction will further strengthen Income Insurance’s market-leading position in the fragmented non-life sector, while we expect the life sector to continue to be dominated by the current five-biggest insurers, including Great Eastern Life Assurance Company Limited and the subsidiaries of global insurance groups,” Fitch said.
The transaction – which is subject to regulatory approval – is expected to close either in the fourth quarter of 2024 or the first quarter of 2025
