On Monday, Singapore’s government decided to block the deal until Allianz addressed some of its concerns, including whether Income Insurance will be able to continue its social mission. 

“It would not be in the public interest for the transaction in its current form to proceed,” Edwin Tong, Singapore’s minister of culture, community, and youth, told the country’s parliament on Monday.

Singapore Prime Minister Lawrence Wong chimed in via a Facebook post as well, noting that while the government wanted a strong partner for Income Insurance, it had concerns about the deal’s current terms. 

Income Insurance started as a cooperative in 1970. Yet when it corporatized in 2022, it was allowed to move 2 billion Singapore dollars to the new corporate entity; if not for the government exemption, the money would have instead been used to support Singapore’s broader cooperative movement. 

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As part of Allianz’s deal to take over Income Insurance, the company would have returned 1.85 billion Singapore dollars ($1.41 billion) to shareholders. 

“The proposed capital reduction runs counter to the premise on which the exemption was given,” Tong said in his statement Monday. 

But Singaporeans’ emotional attachment to Income Insurance might have also played a role in blocking the deal.

Income was originally founded to fill a need for affordable insurance in Singapore. Even today, almost 73% of Income Insurance is owned by NTUC Enterprise, a holding cooperative. Income Insurance has about 1.7 million customers, according to its website.

When Allianz announced its offer in mid-July, Singaporeans worried that the acquisition would lead to higher premiums.

Commentators weighed in, too. Tommy Koh, a veteran Singaporean diplomat, argued that Income Insurance should not be sold, and that it was founded to “serve a social purpose.” He later expressed worries that a foreign owner like Allianz would not devote resources to products targeting needy populations, such as Income Insurance’s 2010 scheme offering free insurance to families with young children, or its 2013 decision to provide insurance coverage to children with autism. 

The blocked deal “underscores the importance of speaking up in matters of public interest,” Tan Suee Chieh, a former CEO of Income Insurance back in its cooperative days, wrote in a LinkedIn post on Monday. Tan has been an outspoken critic of the acquisition, arguing previously that Income Insurance is meant to serve Singaporeans, “not the shareholders of Allianz Europe BV.”

If the deal had gone through, Allianz would have become the fourth largest insurer in Asia, up from its current ninth position. Allianz also said in July that the Asia-Pacific region is a strategically important growth market, and that the region generated almost €7.7 billion ($8.4 billion) in total business volume across its property-casualty and life/health businesses last year. 

In a statement, Allianz said it respected the government’s decision, but affirmed its belief that a deal with Income Insurance would benefit Singaporean customers and society.