ING Direct 2004 Annual Report Download - page 24

INSURANCE ASIA/PACIFIC
(continued)
1.2
OUR PERFORMANCE
22 ING Group Annual Report 2004
In Australia, cost synergies in our life insurance business have
largely been realised and the results of the joint venture have
started to become visible on the revenue side. In Taiwan, new
products were introduced with larger unit-linked or participating
elements to take account of the low interest rate environment.
Our future growth markets
ING has a strong commitment to China through two life
insurance joint ventures and an investment management
joint venture. ING is one of the top-ranked foreign insurance
companies in China. We decided to further expand the
activities in China. In February 2004 ING’s joint venture based in
Shanghai opened a branch office in Guangzhou. In September
2004, approval was granted by the regulatory authorities
allowing ING to establish a fourth life insurance branch office
in China, in the highly important market of Beijing.
In India, ING has a 26% stake in the life insurance joint venture
ING Vysya Life. It started operations in 2003, with encouraging
results. In addition, through our 44% holding in ING Vysya
Bank, we are continuously working to improve our distribution
of insurance products through the bank channel. At the same
time, our tied-agency strength has increased significantly.
Pension activities
Asia offers high growth potential in pensions. Many countries
are planning or contemplating pension reforms, such as in
Korea, where at the end of 2004 the opportunity was created
for private providers to offer occupational pensions. ING wants
to increase its presence in this sector and is active in advising
governments and private institutions in helping to achieve
sustainable pension systems. In 2004, ING provided
government advisory services in Korea, India, China and
Thailand. Fund inflows into ING pension funds in Hong Kong
and Japan increased EUR 31 million.
ING Investment Management Asia/Pacific
ING is the second-largest fund manager overall in Asia
(outside Japan) and the tenth-largest institutional manager
after seven years of operations. The assets under management
of ING IM Asia/Pacific are fast growing as a result of its strong
distribution capabilities in the region and advanced product
offerings. Gaining from ING IM’s strategy and products in
other parts of the world, ING has successfully introduced
in the Korean market a ‘protected mix’ strategy (which
guarantees investors’ initial principal) and ING Antai in Taiwan
has successfully marketed ING IM’s Global Brands equity funds.
CONCLUSIONS AND AMBITIONS
Based on its current strong position in Asia/Pacific, ING strives
to outperform its competitors, continuously improve the
performance of its existing businesses and to deepen its
presence in its core markets.
This objective has been set in the context of a difficult market
environment – given the potential pressure on new business
margins resulting from product mix shifts towards more
savings-oriented and investment-linked products – and in
volatile macro-economic circumstances, exemplified by low
interest rates and other investment risks.
To meet these challenges ING has set a number of concrete
objectives. First, ING wants to continue to gain market
share in selected markets by building new partnerships
and strengthening existing alliances.
ING will also continue to focus on improving its products,
concentrating on expanding profitable product offerings
while closing down product offerings which are high risk
or offer only a low level of profitability.
ING plans to build on its distribution capabilities by reaping
the full benefits of its alliances and joint venture partnerships,
while seeking new and stronger distribution opportunities.
In addition, the productivity of the tied-agency channel will
be reinforced by improved recruitment, training and the use
of ING’s experience in other parts of the world. We put
increasing emphasis on bancassurance as this is considered
to be a key distribution growth area for the region.
ING will strive to further improve its value-based management
and risk management instruments by applying strict risk-
return measures.
ING aims at deepening and expanding activities in Asia/Pacific.
In the Asian countries where it is active – notably in China,
India and Japan – ING is working to strengthen partnerships
and examines new growth opportunities.
The mix of the investment management business across
proprietary, mutual fund and institutional client groups means
it has a diversified growth base and together with ING’s life
insurance businesses, the aim is to achieve significant market
share in each market.