Double-digit return expected from Income deal: Allianz CEO

He says firm fully committed to Income’s cause in providing affordable insurance access

- Kang Wan Chern

German insurance provider Allianz is expecting a "double-digit return on investment (ROI) over time" on its acquisition of Income Insurance, said its chief executive Oliver Baete on Aug 8.

Speaking during the company's second-quarter earnings briefing in Frankfurt, he said: "More importantly, (the acquisition) creates a very strong home base for us. We have been domiciled in Singapore since 1991, but never had an operating business in the city-state."

He added: "Now, we do have it and it is with a leading franchise and we are proud of having thetrust of the community to do so." Allianz in July revealed plans to buy a 51 per cent majority stake in Singapore's Income for $40.58 a share, three months after selling some of its US insurance businesses. NTUC Enterprise will hold up to a 49 per cent stake post-acquisition.

Mr Baete noted the US sales took place after the company concluded that the capital required to build a market-leading position in the United States was too much for it.

"We are recycling the gains out of the US from selling in a sub-scale space to investing into scale in Asean," Mr Baete said, adding that a majority stake in Income would propel Allianz "from zero to a leadership position in Singapore".