NTUC Income : managing social mission and business goals in a market-driven economy

Abstract

(formerly titled "NTUC Income Moves Into Uncharted Waters -- A Union-based Insurance Cooperative Faces The Liberalization Of The Financial Industry In Singapore") This case traces the corporate history and development of NTUC Income (INCOME), the only insurance cooperative in Singapore. Established in 1970 as the "poor man's insurer" with the social goal of providing coverage for the low and middle income groups, INCOME today ranks among the top life and general insurers in Singapore. While INCOME has been very profitable since its inception, it has never lost sight of its social and community role of serving its policyholders and the citizens of Singapore. This fact was not missed by the Prime Minister of Singapore who urged the cooperative "not to forget those in the lower income bracket" when he graced the cooperative's 30th anniversary celebration as Guest-of-Honour. Since 2001, the local insurance industry had undergone major changes in the form of new regulations following the Monetary Authority of Singapore's liberalization of the financial services industry. One regulation, in particular, required all insurance agents in Singapore to undergo at least 30 hours of professional training annually. This ruling would have an adverse impact on INCOME's part-time agents who made up more than 80 percent of the cooperative's sales force. Many were likely to quit and INCOME could soon see its part-time sales force halved. The liberalization was also expected to attract new players to the insurance market. With new challenges posed by the liberalization, what would the future hold for INCOME? INCOME had enjoyed years of tremendous growth and had emerged from the Asian Crisis relatively unscathed. Could its previous success help pave the way for continued prosperity? In the face of greater competition, how should INCOME continue to meet its social objectives without neglecting or giving up some of its business goals?