Was poor comms to blame for the uproar around Income's sale to Allianz?

The conversations around the potential acquisition of Income are showing no signs of slowing down with the debate going strong on both online and on mainstream media.

On 17 July, German insurer Allianz said that it had given a pre-conditional voluntary cash general offer to acquire at least 51% of the shares of Income Insurance, where it intended to offer SG$40.58 per share for a total transaction value of approximately SG$2.2 billion for 51% of the shares in Income Insurance.

Following the announcement, Income Insurance released a statement clarifying some queries from shareholders and policyholders who expressed concern.

Don't miss: Allianz's potential acquisition of Income Insurance sparks mixed reactions online

It said that NTUC Enterprise remains firmly committed to Income Insurance and its stakeholders, including policyholders and shareholders, and will continue to do so as it will remain a substantial shareholder following the close of the offer.

Further explaining the sale of the stake, chairman Lim Boon Heng of NTUC Enterprise, Income Insurance’s parent organisation, told The Straits Times that the deal was intended to give Income a boost in a highly competitive market so that it could fulfil its social mission.

He explained that NTUC Enterprise was expected to receive about SG$1 billion if the deal went through, and that this would be used in ventures such as “education and health, particularly in services for the elderly”.

Presumably to quell some of the dissent from netizens around the sale, the press conference then ignited response from prominent figures such as veteran diplomat Tommy Koh, who expressed disappointment over Allianz’s plans to acquire a majority stake in Income. Pointedly, he said he was not convinced by Lim’s reasons as to why Enterprise is willing to sell a majority stake in Income to a German insurance company.

Income, he highlighted, was established as a cooperative with a mission to make insurance accessible and affordable to the ordinary people of Singapore. He added that in 2013, Income was the first insurance company to provide insurance coverage for children with autism. “I don’t think a foreign insurance company would have launched such products,” he said.

“Income is not a loss-making company in need of rescue. In its 54-year history it has always been a profitable company. In view of this fact why does NTUC Enterprise wish to sell Income? Is it because it will make a profit of SG$1 billion?” he questioned. He ended the post saying that as an older Singapore, he feels sad that for many younger Singaporeans, the sale signals that nothing is sacred.

“We should remember the warning by our first foreign minister, S Rajaratnam. He warned us not to become a nation of people who know the price of everything but the value of nothing,” he concluded.

Koh was not the only prominent Singaporean to speak out against the acquisition. In a commentary on CNA, former group chief executive of NTUC Enterprise Tan Suee Chieh, who served the post from 2013 to 2017, said what he understood when Income was corporatised was that NTUC Enterprise would remain a majority shareholder.

“This understanding was breached in less than two years after Income Insurance was corporatised. With these as a backdrop, it is hard to regard any further commitments made seriously,” Tan said.

Currently, online, there’s also been a petition going around to stop the sale.

PR professionals MARKETING-INTERACTIVE spoke to all agree that from a communications perspective, what is lacking is a consistency in what has been said.

“NTUC Enterprise's messages come across unplanned and contradictory, without a clear roadmap to show what will be the use of the proceeds of the sale of Income,” said one PR professional, who has worked with several government linked entities.

Detractors on the other hand, have been able to eloquently put together why a sale would not be ideal. She added:

It is not often you get so many eloquent views articulated, with no convincing rebuttal from the establishment.

Jose Raymond, managing director of SW Strategies added that the public and stakeholders' engagement strategy was a miss, mainly because an organisation such as Income also has the general public as stakeholders due to its history and foundation. “There’s always a need for pre-education and engagement prior to a major announcement - more so given that Income is well regarded as a respected and revered social enterprise,” he said.

In this situation, a targeted engagement approach is crucial to share what’s possibly going to take place and then pave the way for eventual acceptance. “At least this would reduce the friction,” he said, highlighting that the major fails in this situation were that:

- Former CEOs were not informed
- The public at large was not educated
- ⁠Key influencers were not informed

Agreeing that the education on public benefit was missing, Jacob Puthenparambil, CEO of Redhill said:

If I were to represent Income, I would have run an active campaign for already 60 days to educate the public and customers on how this sale would benefit them.

“This would help frame the narrative ahead of the curve and suck the oxygen out of any vested interests who want to drive the narrative away from the goals,” he said.

But trying to do so after a crisis is never easy. He added that essentially, more education was needed as to why NTUC Enterprise is selling something that was built has a social institution to a private foreign company.

“What people need is clarity and justification, and that’s where the communication failed,” he said.

Photo courtesy ofStreetdirectory.com

Explore transformative trends to empower your brand for sustainable growth. Join 500+ marketing minds at Digital Marketing Asia 2024 Singapore on 1-2 October and uncover transformative trends to empower your brand, network with industry leaders and collaborate across industries, and discover real-life marketing wins and powerful ideas.

Related articles: 
Allianz Group names new global media partner
Income Insurance plays on the flexibility of cats to highlight new products
Etiqa Insurance takes to new TEL stations with interactive game and vibrant displays