Comment: Allianz deal falls through, but Income Insurance can’t just wait for a white knight

Strive for organic growth

Another option is for the income insurance to grow on its own or organically. This is the most obvious and practical choice as new strategies for market and product development can be actively pursued.

Organic growth requires new ideas and talent. It may strengthen its sales strategy, for example through the financial advice channels it is already pursuing. The biggest challenge could be a contradiction: income must go to the mass market while focusing on the target labor market – a dual market strategy can be considered, but this is difficult to manage.

Diversification into related financial products may be considered. However, this risks diluting the insurance focus and diverting management attention.

New sources of capital must be sought. One suggestion was listing on the stock exchange. However, this needs to be carefully considered taking into account compliance requirements and shareholder pressure for financial returns.

Income Insurance likely cannot return to its original cooperative model. There may be benefits, but the key question is where future funding might come from. Should unions foot the bill, diverting resources from other areas of employee welfare? Will mass market customers support its social mission and purchase products that are not the most competitively priced?

Selecting strategic options for the path to income insurance 2.0 is complex. It must retain its social character but also be able to withstand the global market test.

This is a big task. And if it fails, the broader question will be: what would Singapore lose in the insurance sector, particularly in the social sector, and should public funds be allocated accordingly?

Lawrence Loh is Director of the Center for Governance and Sustainability at NUS Business School at the National University of Singapore, where he is also Professor of Strategy and Policy Practice.