If NTUC Income is not a cooperative, will it behave differently?

A visitor sent the following questions to me, about cooperatives in Singapore. Here are the questions and my reply.

COMMENT BY VISITOR

Visited your blog earlier and indeed the commentaries there have been very informative. I’m not sure it is appropriate to ask you to comment on co-operatives in Singapore (NTUC Income, I believe, is the largest). But I would be grateful if you could share your enlightened views on

A) The general status of cooperatives in Singapore:

Reply: A few cooperatives have large operations and are doing well in Singapore.

For example, NTUC Fairprice runs a large and successful chain of supermarkets. They commend a large market share and are able to bring the prices down for consumers.

NTUC Income runs a large insurance operation and serves 2 million people. With our large market share, we are able to provide insurance coverage at low and affordable premium.

B) Would NTUC Income be significantly different if it were not constituted as a cooperative?

Reply: Yes, NTUC Income will be significantly different, if we were not constituted as a cooperative.

We would be charging higher premiums, to increase profit for shareholders. We would also find reasons to challenge claims and avoid paying them, also to increase profits. These are the reasons why I do not want NTUC Income to be profit driven.

C) How would you see cooperatives heading in the future (such as more cooperatives competing against each other)?

Reply: I wish to see more cooperatives making a big impact in the future. I hope that they will form a larger market share than today.

If more cooperatives are formed, there is the risk that they might compete against each other. This does not really matter.

In practice, they are likely to target different segments of members, so the risk of competition and conflict is small. Even if there is competition, the conflict should be minimal, as all cooperatives follow the same cooperative principles