Our Raison D’etre
Since its founding in 1961, the National Trades Union Congress (NTUC) has protected and uplifted workers’ lives and livelihoods.
We remain unwavering in our commitment to remain alongside every worker. Workers will always be at the core of all we do.
Lives and livelihoods
We have kept true to our mission throughout the decades.
Since our historic 1969 Labour Modernization Seminar 55 years ago, we have cared for the social well-being of our workers and their families.
More recently, we raised the wages of lower-wage workers through the Progressive Wage Model.
We preserved a lifeline for workers during the COVID-19 pandemic with the Job Security Council. Our Company Training Committees ensure our workers are ready for the future economy, with wages increasing as their companies transform.
Over the past decade, our social enterprises have contributed almost S$300 million to various charity programmes. They could not have done so had they not been financially sustainable.
Indeed, we have abided by this principle since 1970 when our first social enterprise, NTUC Income, was formed: To do good, you must also do well.
On the need for sustainability
For Income, the key to financial sustainability is capital adequacy.
Income’s capital buffers have repeatedly come under pressure – from the Asian Financial Crisis in 1997, through SARS and the Global Financial Crisis in 2009, to the recent COVID-19 pandemic.
NTUC Enterprise itself has put in significant amounts into Income over the years. Between 2015 and 2020, including when COVID-19 hit us, NTUC Enterprise injected a total of S$630 million into Income.
As a shareholder, NTUC Enterprise will continue to support Income. But it cannot do so alone.
That is why Income was corporatised in 2022 so that it could have more options to access capital.
Post-corporatisation, Income explored strategic options with several financial and non-financial institutions, both foreign and local.
Retaining majority shareholding and keeping Income locally owned would have been ideal, but unfortunately, there was no alignment of interests.
In the end, Allianz’s credentials proved to be strongest, with the interests on both sides aligned.
NTUC Enterprise needed to make a choice that was in the best interest of Income’s longevity, for the sake of our policyholders. A strong industry leader would give Income the backing of two strong shareholders.
It was a hard decision. We took comfort in knowing that the partnership would enable Income to sustain its social mission for the longer term.
The NTUC Central Committee was briefed. We fully appreciate the concerns and feelings shared by many members of the public. In fact, our union leaders have an even stronger emotional attachment to Income.
For us, it is not just any insurance company. Income was NTUC’s first social enterprise and a key pillar of Singapore’s social infrastructure in our developing years.
But we understand how dramatically the landscape has changed over the last 55 years. When Income was set up in September 1970, most workers, the Pioneer Generation, were uninsured. Leveraging NTUC’s affiliated unions, Income provided them with much-needed insurance protection at affordable rates.
Half a century later, Singaporeans’ needs and the insurance industry have both evolved in ways the pioneers could not have imagined. Nor could they have imagined the breadth and depth of the social infrastructure we have now.
Public healthcare is heavily subsidised. The Government provides universal healthcare coverage with MediShield Life. It created a universal retirement annuity scheme with CPF Life. It has also mandated medical insurance and coverage for workplace injuries.
Singaporeans today, including lower-income workers, are well served by our national insurance programmes and our competitive and well-regulated insurance industry.
In the meantime, in the past 10 years, Income Insurance’s market share in the life insurance segment has fallen to less than 10 per cent by value (based on data from the Life Insurance Association). Despite strenuous efforts, Income’s share has shrunk in a fiercely competitive life insurance market. Singaporeans now have many attractive and competitive insurance options to choose from.
In this fiercely competitive environment, it became plain that Income can only continue to fulfil its social mission if it has access to additional resources and the ability to scale.
Insurance is a long-term responsibility. We cannot think in five- or even 10-year time frames. The obligations stretch out over much longer – 50 years or more. Our policyholders entrust Income with their hard-earned savings year after year and look forward to payouts in their silver years.
Income can meet its long-term commitments to policyholders only if it is sufficiently capitalised, not just for now but well into the future. The offer from Allianz will help to secure this.
That is why, after full and serious consideration, the NTUC Central Committee decided to support NTUC Enterprise’s consideration of the offer from Allianz.
We believe the offer is good for Income, good for its policyholders, and will enable us to fulfil our mission from a stronger position.
We will uphold our Social Mission
NTUC remains deeply committed to our social mission.
NTUC Enterprise will continue to retain a substantial stake in Income. Allianz has also committed to honouring Income’s existing policies, participating in national insurance programmes, and continuing its charity commitments, including the pledge of S$100 million over 10 years from 2021 to promote social mobility among the lower-income and support the well-being of seniors.
Income now offers two low-cost schemes for union members – NTUC GIFT1 and Income Insurance LUV2 life insurance.
Income has assured NTUC that it will continue with these schemes and keep the premiums affordable for policyholders, especially those in the lower-income segments. NTUC will ensure that Income upholds this commitment.
NTUC’s social mission will not change.
Our portfolio of enterprises – be it in insurance, childcare, eldercare, supermarket or skills training – will continue to provide affordable and quality essential goods and services to Singaporeans. They will also continue to provide choices to customers within the competitive marketplaces in which they operate.
We will continue to work tirelessly, with compassion and dedication, so all our workers can have better lives and livelihoods.
That is our unwavering pledge.
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K Thanaletchimi President NTUC |
Ng Chee Meng Secretary-General NTUC |
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1NTUC GIFT is a group insurance policy exclusively for members of NTUC-affiliated unions and associations. The insurance premium is fully paid by NTUC, with co-payment from the affiliated unions or associations.
2 An affordable group term life insurance policy for NTUC members.
