NTUC Income has announced on 6 January 2022 a proposed corporatisation exercise to convert from a being co-operative (co-op) to a company governed by the Companies Act. The plan is part of NTUC Income’s strategic plan and goal to better serve customers.
An extraordinary general meeting will be held to seek members’ approval for corporatisation.
Income will transfer its existing insurance business and assets to the new company, Income Insurance Limited, and the co-op will be liquidated after the meeting.
The proposed corporatisation exercise will only change Income’s legal form. It will not affect the company’s organisational structure or its business operation, said Income.
The proposed corporatisation exercise is expected to be completed by the second half of 2022.
In response to this exercise, NTUC Income Chairman Ronald Ong said: “We see corporatisation as a strategic and essential pivot for Income to scale its business quicker locally and regionally, invest in growth channels and markets, as well as digital capabilities to effectively compete more equitably with other insurers.
“More significantly, we will be even more responsive to changing customer needs via insurance solutions that speak to today’s digital-first lifestyles and customers.”
NTUC Income Chief Executive Andrew Yeo assured that Income’s goal of improving Singaporean’s financial well-being will remain the company’s core principle.
“Shifting from a co-operative to a corporate entity will have no bearing on our commitment to deliver positive customer impact through our products, services, and people. Income remains committed to driving financial inclusion via more comprehensive and accessible insurance innovations, as well as initiatives that build social inclusion,” he said.
Income was formed in 1970 to fill the need for essential insurance for underserved workers.
According to Income, it remains steadfast in its purpose till today, and it will continue to strive to empower all Singaporeans and improve their financial well-being.
As part of its renewed sustainability strategy, Income will be committing $100 million over 10 years to support causes that help the lower-income group, the education of youths and children in need, the elderly and the environment.
The corporatisation exercise will not affect existing policyholders’ current policy coverage, benefits, and terms.
Income’s distribution channels and business partners are also expected to continue their same contractual terms and conditions following the exercise.
Income said that there will be no changes to staffs’ existing employment contracts, benefits, and roles following the corporatization exercise.
In fact, the company believes that employees can look forward to more career growth opportunities as the proposed exercise could potentially open a wide range of strategic growth paths for Income.
“We want to reassure all employees that we will continue to create and provide meaningful jobs at Income as we pivot to become a company. As Income embarks on an ambitious growth trajectory, retaining and nurturing employees will hold even more importance,” said Mr Yeo.
Once the company has been corporatised, existing institutional and ordinary members of Income who hold co-op shares will receive an equivalent number of shares in Income Insurance Limited, on a one-for-one basis, and their co-op shares will be cancelled.
Shareholders of Income Insurance Limited will have one vote per share.
To preserve the co-operative identity, under the Co-operative Societies Act, institutional members must be co-ops and trade unions.
It is worth noting that unlike co-op shares, the value of the shares under Income Insurance Limited will not be capped at par value, or $10 per share.
