ING Direct 2007 Annual Report Download - page 16

In 2007, underlying profit before tax
declined 18.2% to EUR 1,840 million,
as stronger life insurance results in
Belgium and Central Europe did not fully
offset lower results in the Netherlands.
The successful sale of part of the Belgian
insurance business limited the decline in
total profit before tax, which includes
divestments, to 2.6% to EUR 2,300 million.
The value of new business (VNB) increased
strongly, by 82.6% to EUR 400 million,
in particular due to higher sales in
Central Europe.
Europe’s insurance industry faces three key
trends. Firstly, the need for insurers to focus
on longevity risk and providing customers
with solutions that help them accumulate
sufficient retirement capital. Secondly, a
growth of the bank and direct channel at
the expense of the intermediary channel in
the distribution of commodity products.
And finally, increased transparency
requirements and heightened competition,
particularly in the Benelux.
Addressing the trends
To address these trends, Insurance Europe
tailors its strategies to the markets in
which it operates. So in the Benelux, with
moderate growth, we focus on optimising
distribution channels and improving
efficiency, Nationale-Nederlanden (NN)
being a prime example; while in fast-
growing Central European markets the
emphasis is on accelerating growth.
This strategy is underpinned by active
redeployment of capital within ING Group
to those regions (high-growth markets),
products (retirement services) and
distribution channels (especially bank and
direct) offering highest growth potential.
Well-positioned in the Benelux
In the Benelux, we continue to focus on
cost reductions and customer satisfaction to
sustain the profitability of ING’s Insurance
A by-word
for excellence
Profit and loss account (underlying)
in EUR million 2007 2006 change
Premium income 10,253 9,854 4.0%
Operating expenses 1,726 1,702 1.4%
Underlying profit before tax 1,840 2,249 –18.2%
Total profit before tax* 2,300 2,362 –2.6%
* Total profit before tax is defined as profit before tax including
divestments and special items.
Insurance Europe showed a solid financial
performance in 2007, improving efficiency
and optimising distribution channels in the
Benelux, accelerating growth in Central
Europe, and reinforcing ING’s position
across Europe as a specialist provider
of investment and retirement services.
In September 2007, the Romanian
government introduced mandatory private
pension funds. ING Romania responded by
extending its flexible sales force by a
remarkable 40,000 distributors, all of whom
had to be recruited and trained. The resulting
campaign, from which this photo is taken,
attracted over 1 million new clients and more
than 30% market share by year-end,
considerably outperforming all competitors.
But it’s not just about the numbers. When it
comes to life insurance and pensions, ING
has become a by-word locally for excellence.
A fantastic achievement in a country where
we only arrived less than ten years ago.
14 Our performance
Insurance
Europe