ING Direct 2006 Annual Report Download - page 19

“ Over half the world’s population lives in the
Asia/Pacifi c region. That suggests huge growth
potential. Distribution is key in reaching that
large market segment.”
Hans van der Noor daa, Executive Board member
responsible for Insurance Asia/Pacifi c
Insurance Asia/Pacifi c Profi t and loss account (underlying)
in EUR million 2006 2005 change
Premium income 12,136 12,286 -1.2%
Operating expenses 965 864 11.7%
Underlying profi t before tax 621 447 38.9%
Total profi t before tax* 636 478 33.0%
* Total profi t before tax is defi ned as profi t before tax including
divestments and special items.
Insurance Asia/Pacifi c continued to
deliver strong results in 2006, largely
assisted by strong profi t growth in
South Korea and Japan. The Asia/Pacifi c
region accounts for almost half of the
Group’s total value of new business.
Underlying profi t before tax from
Insurance Asia/Pacifi c increased 38.9%
to EUR 621 million, driven by South Korea
(+44.5%) and Japan (+110.8%). Total
underlying premiums decreased slightly
to EUR 12,136 million, as higher income in
Australia, South Korea and Taiwan were
offset by lower single-premium variable
annuity (SPVA) sales in Japan. Underlying
operating expenses increased 11.7% to
EUR 965 million, refl ecting the increase in
business volumes, the focus on building
organisational capabilities and investing
in greenfi eld operations. Assets under
management increased by 21.2%,
reaching EUR 84.2 billion by year-end 2006.
Leveraging the core businesses
ING continued to focus on bolstering its
existing businesses in particular by streng-
thening its multiple distribution channels,
introducing new, more profi table products
and increasing operational effi ciency.
ING sells its life insurance products in the
region through tied agents, banks, securities
houses and alternative channels. Tied agents
contribute the majority of the life insurance
sales. The number of tied agents continued
to grow and in India there was a more than
40% rise in their number to over 26,000 in
2006. In line with customers’ preferences,
the design of products has shifted towards
more simple and channel-specifi c products.
70%
In Australia, our OneCare fl exible life risk
package increased sales by over 70%. On an
operational level, regional roll-outs of
straight-through processes have begun along
with a large number of effi ciency projects.
Growth opportunities abound
Growth in life insurance in Asia is expected
to outperform the rest of the world in
the next ten years. At the same time,
national regulators have introduced or
are introducing regulations to encourage
people to save for their fi nancial future to
relieve pressure on the public purse as more
people approach pension age. All of this
creates substantial opportunities for ING,
which enjoys leading positions in both life
insurance and pensions. In addition, the
move away from guaranteed (fi xed income)
products to investment-linked (unit-linked)
products and a signifi cant rise in distribution
through banks and alternative channels
have opened up opportunities for ING,
as we have expertise and experience in
both these areas.
Looking ahead
Insurance Asia/Pacifi c will continue to
pursue profi table growth in its existing
markets by growing and leveraging its
core businesses. This involves strengthening
distribution channels, launching more
profi table products, expanding organisational
capabilities, increasing operational effi ciency
and enhancing brand awareness.
Up to 45% of Australian adults with fi nancial
dependants have no life insurance cover. ING’s
solution is OneCare. This product provides a
comprehensive range of insurance options
under one policy so customers can select a
package to suit their circumstances. OneCare
offers discounts based on the number of
options, length of time and number of
colleagues or family members under the same
policy. In 2006, OneCare increased sales by
over 70%.
ING Group Annual Review 2006 17