This deal will make it the largest property and casualty insurer in Singapore.

Allianz's plan of taking the majority stake in Singapore's Income Insurance will most likely not have significance in the Lion-city's insurance market, according to Fitch Ratings.

This move will even solidify Income Insurance's leading position in the non-life sector, whilst the life sector will continue to be dominated by the top five insurers, such as Great Eastern Life Assurance Company Limited and global insurance group subsidiaries.

The acquisition consolidates market positions rather than disrupting them.

On 17 July, Allianz announced plans to acquire a 51% stake in Income Insurance for about $1.6b, potentially leading to a name change for the Singapore insurer.

Pending regulatory approval, NTUC Enterprise Co-operative Ltd will retain between 21.8% and 49% of shares, depending on other shareholders' acceptance. Income Insurance, a top composite insurer in Singapore with over 50 years of history, stands to gain from Allianz's global expertise and potential synergies.

This deal will make it the largest property and casualty insurer and the fifth-largest life insurer in Singapore.

"We expect the proposed acquisition will also strengthen Allianz's presence in Asia, a region identified as strategically important for the group's growth, and to elevate it from the ninth- to the fourth-largest composite insurer by insurance revenue in Asia, according to Allianz," Fitch Ratings said in a note. "The proposed acquisition aligns with Allianz's strategic objective to grow inorganically in the non-life sector rather than the life insurance segment and to become a leader in its markets,"

Singapore's insurance market, supported by stable economic fundamentals, a sound regulatory framework, and a wealthy population, attracts foreign insurers through mergers and acquisitions.