The decision, announced on Monday, followed amendments to Singapore’s Insurance Act and a government declaration in October that the deal could not proceed in its current form.

The proposed acquisition, first unveiled in July, aimed to increase Allianz’s market position in Asia, elevating it from the ninth-largest to the fourth-largest composite insurer in the region. However, the bid faced significant pushback in Singapore, with critics voicing concerns that the deal could undermine Income Insurance’s mission to provide affordable coverage for lower-income workers. Singapore’s Prime Minister Lawrence Wong publicly opposed the acquisition, noting that the city-state would block the deal unless these concerns were addressed. Subsequently, the government amended its Insurance Act, enhancing its oversight of buyouts involving insurers with cooperative roots.

“We respect the Singapore government’s decision,” said Renate Wagner, a member of Allianz’s management board responsible for the Asia-Pacific region. Wagner maintained that combining Allianz with Income Insurance would have created a stronger business to benefit policyholders and customers in Singapore.

Despite this setback, Allianz reaffirmed its commitment to the Asia-Pacific region, which it considers a strategically important growth area. Singapore, as a key financial hub in Southeast Asia, remains a priority market for the company. Allianz has been steadily expanding in Asia, including growing its investment division in China and receiving regulatory approval in 2022 to establish an onshore fund management company there.

In response to the withdrawn bid, Income Insurance reiterated its focus on providing inclusive and affordable products for vulnerable groups in society. Founded in 1970 as a cooperative to support Singaporean workers, the insurer is seen as a national icon and one of the country’s four systemically important insurers, according to the central bank.

“The proposed transaction would have provided shareholders with the opportunity to fully realise their investment,” Income Insurance said in a statement, acknowledging the growing demand from minority shareholders for a liquidity option since 2022. The company announced that it would explore other options to unlock shareholder value while maintaining its social mission.

Although the Allianz deal is off the table, both parties remain committed to their respective goals, with Income Insurance exploring new avenues for shareholder liquidity and Allianz continuing its broader push to grow in Asia.