ING Direct 2004 Annual Report Download - page 123

ING Group Annual Report 2004 121
Allocated income and expenses Income and expenses that are not directly recorded in operating result from insurance
operations, are allocated to the Result from life underwriting and Result from non-life underwriting on the basis of life
insurance provisions and non-life insurance provisions of the insurance companies.
GEOGRAPHICAL ANALYSIS OF CLAIMS RATIO, COST RATIO AND COMBINED RATIO FOR NON-LIFE INSURANCE POLICIES
Claims ratio Cost ratio Combined ratio
2004 2003 2002 2004 2003 2002 2004 2003 2002
Netherlands 60.6 69.8 77.5 36.8 31.0 28.9 97.4 100.8 106.4
Belgium 71.1 70.6 76.7 36.7 35.1 34.7 107.8 105.7 111.4
Rest of Europe 46.1 40.9 49.8 35.8 37.0 41.6 81.9 77.9 91.4
North America 61.0 73.9 77.7 27.6 24.7 25.6 88.6 98.6 103.3
Latin America 71.8 68.1 68.8 27.6 26.9 25.6 99.4 95.0 94.4
Asia 56.6 55.1 66.6 40.9 43.5 51.5 97.5 98.6 118.1
Australia 46.3 49.9 66.9 28.0 28.5 29.5 74.3 78.4 96.4
Other 62.8 42.4 94.4 16.4 51.6 7.8 79.2 94.0 102.2
Total 63.0 69.4 75.0 30.6 28.2 27.1 93.6 97.6 102.1
The claims ratio is the claims, including claims handling expenses, expressed as a percentage of net earned premiums.
The cost ratio is the costs expressed as a percentage of net premiums written. The claims ratio and the cost ratio together
form the combined ratio. A combined ratio of more than 100% does not necessarily mean that there is a loss on non-life
insurance policies, because the result also includes the allocated investment income.
Analysis of premium income of the insurance operations
Reinsurance ING Group is involved in both ceded and assumed reinsurance for the purpose of spreading risk and limiting
exposure on large risks. Reinsurance premiums are recognised in Underwriting expenditure.
EFFECT OF REINSURANCE ON PREMIUMS WRITTEN
Non-life Life Total Non-life Life Total Non-life Life Total
2004 2003 2002
Direct premiums written, gross 6,592 35,532 42,124 7,226 32,587 39,813 7,869 37,608 45,477
Reinsurance assumed premiums
written, gross 50 1,443 1,493 62 1,317 1,379 48 1,291 1,339
Total gross premiums written 6,642 36,975 43,617 7,288 33,904 41,192 7,917 38,899 46,816
Reinsurance ceded 756 1,619 2,375 930 1,102 2,032 1,275 1,093 2,368
5,886 35,356 41,242 6,358 32,802 39,160 6,642 37,806 44,448
The reinsurance covers with respect to catastrophe exposure for the non-life insurance business have been designed to cover
a large part of exposures resulting from events with a return period up to once in 250 years.
To the extent that the assuming reinsurers are unable to meet their obligations, ING Group remains liable to its policyholders
for the portion reinsured. Consequently, provisions are made for receivables on reinsurance contracts which are deemed
uncollectible. To minimise its exposure to significant losses from reinsurer insolvencies, ING Group evaluates the financial
condition of its reinsurers and monitors concentrations of credit risk arising from similar geographical regions, activities or
economic characteristics of the reinsurer.
As at 31 December 2004, the receivables from reinsurers amounted to EUR 388 million (2003: EUR 567 million; 2002: EUR 797
million), against which EUR 7 million (2003: EUR 12 million; 2002: EUR 20 million) was provided for as uncollectible reinsurance.