SINGAPORE - Shareholders of local insurance provider Income Insurance (Income) now have an additional option to sell their shares in the company, following a change in its legal structure in September 2022.

The new option, announced on Jan 12, will enable retail and individual shareholders to sell their Income shares through local brokerage Phillip Securities. The shares will subsequently be converted to tokens and traded on private digital securities exchange Alta.

Phillip Securities is a subsidiary of PhillipCapital, which is a shareholder of blockchain-powered Alta. In 2022, the value of orders placed on the platform amounted to US$32 billion (S$42.9 billion), and it hit US$195 billion in 2023, a rise of 500 per cent. 

The move is expected to make it much easier for existing shareholders to sell their shares in Income, a public non-listed company, by shortening the process from months to a matter of days.

Alta chief executive Kelvin Lee said: “Trading is made easy due to the simplified transfer, clearing and settlement process, which also results in lower costs.”

Under Income’s previous cooperative structure, shareholders had the option to redeem their shares at par value or $10 each.

After NTUC Income Insurance Cooperative corporatised and transferred its business to Income Insurance in 2022, co-op shareholders received an equivalent number of Income shares on a one-for-one basis, but the option to redeem was no longer available.

“To fulfil this need, Alta partnered Phillip Securities to provide liquidity for Income shareholders,” Mr Lee said.

“Investors can utilise our exchange for price discovery. We expect demand to be healthy following Income’s corporatisation exercise, as investors seek a venue to trade shares,” he added.

Being a public non-listed company means that while the public can own shares in Income, the shares are not available for trading on a stock exchange and are typically traded directly between two parties.

In the absence of a market share price, shareholders can reference its net asset value (NAV) per share to get an indicative value of the shares.

As at Dec 31, 2022, Income’s NAV per share was $29.07, according to information provided by the company.

Based on the calculations presented in an independent report dated Dec 22, 2023, by boutique investment firm KT Capital Group, Income shares could now be worth between $18.60 and $21.70 each.

Mr Lee added that Alta will make the Income shares available to its global network of investors and has already received orders to purchase the shares.

Once the shares are sold, however, retail investors may find it much harder to repurchase them, as Alta is currently permitted to offer tokenised securities to institutional and accredited investors only.

An Income spokesperson said Alta and Phillip Securities are independent third parties and not agents of Income, adding that the company does not endorse or recommend their share liquidity programme.

“Shareholders of Income Insurance should seek independent financial advice and conduct their own due diligence before making their own independent decision on whether to use the services offered by Alta and Phillip Securities.”

The Income spokesperson noted that shareholders can still continue to privately trade their shares on terms that are mutually agreed upon based on a willing seller, willing buyer basis.

The spokesperson added that the 2022 corporatisation exercise was undertaken to better position Income for growth and provide greater operational flexibility to serve its customers. 

“Income Insurance remains strong financially, and its capital adequacy ratio maintains well above regulatory requirements. As one of the leading composite insurers, Income now serves over 1.4 million customers in Singapore.”

Income is among the leading composite insurance companies that are permitted to provide both life insurance and non-life insurance premiums in Singapore.

According to research by KT Capital Group, it is the largest property and casualty insurers and among the top five life and health insurers in the Republic.

The spokesperson added: “Shareholders may see potential benefits in the long-term growth and success of the business.”

Income currently has an AA- rating by S&P Global Ratings with a stable outlook post-corporatisation for 2022 and 2023.