ING Direct 2009 Annual Report Download - page 42

Insurance Europe (continued)
funds in Poland, Hungary, Slovakia and Romania, yet the number
of ING pension fund customers continued to grow.
In line with current market circumstances, life sales in Central
and Rest of Europe fell 20% excluding currency effects. However,
this had little impact on profit because expenses were reduced.
Moreover, in the key markets of Hungary and Poland, ING’s market
share in life insurance as well as its total number of policyholders
continued to grow. In addition, Insurance Europe’s cooperation
with ING Direct Spain and with bancassurance distributors, in
countries like Greece, proved successful.
Single operating model
Insurance Central Europe started work on creating a single
operating model in 2009. The new model includes, among other
things, a regional general ledger, a regional product framework
and a harmonised IT platform. Furthermore, a region-wide
operating Shared Services Centre in Cluj-Napoca, Romania, will
begin operating for the entire Central European region in the
course of 2010. Over time, a significant number of the region’s
back-office activities will be concentrated at that centre. Once
implemented, the single operating model will provide a solid
foundation for future growth, enabling the business to increase
its focus on customer service, brand and distribution.
PRODUCT DEVELOPMENT AND INNOVATIONS
IN DISTRIBUTION
The changed economic environment requires new product
characteristics, increased efficiency and cost-effectiveness in
distribution. In the Benelux, the shift in distribution mix from
traditional intermediaries towards bank, internet players and
mandated agents will allow ING to leverage its unique multi-
channel distribution network (internet, bank, independent
brokers, captive brokers, own sales force).
Initiatives have been taken to improve agent productivity and
further professionalise ING’s sales forces. To achieve this ING
will implement centralised recruitment, increase training and
development efforts, and use needs-based selling and segment
propositions for different markets.
Insurance Europe launched several new products in 2009, including
professional liability insurance for freelance professionals from
Nationale-Nederlanden, a surviving dependants plan from RVS
in the Netherlands, a pension with restricted guarantees in Greece,
and a family accidental package product in Poland.
Demand for variable annuity products increased, while their risk
profile and design were adapted for the new market reality. An
example of product redesign was seen in Belgium, where a new
lifetime income guarantee product was introduced. This simplified
variable annuity product generated about EUR 144 million in sales
during 2009. New accumulation products were also launched
successfully in Italy and Hungary. Derisked products continued
to be sold in Spain, Luxembourg, Hungary and the Netherlands
during 2009. These countries contributed almost EUR 100 million
in variable annuity sales. Total new sales of variable annuities in
Insurance Europe amounted to EUR 280 million in 2009,
providing a stable and profitable base for future business.
BACK TO BASICS
Insurance Europe focused on derisking, capital preservation, and
improving efficiency in 2009 as part of the Group’s Back to Basics
programme announced last April. Reduced credit spreads and
balance sheet derisking measures contributed to an improvement
in Insurance Europe’s capital position, leading to a EUR 630 million
capital upstream to ING Insurance.
Insurance Europe also rebased its cost structure to fit the new
economic circumstances. At the end of 2009, a headcount
reduction was realised. All cost reduction programmes are on track.
In line with ING’s strategy of focusing on its core businesses, ING
announced the sale of its non-state pension fund and discontinued
its life insurance activities in Russia. In June, ING Greece announced
it would withdraw from underwriting health insurance risks to
focus on its core business of life insurance and retirement services.
CONCLUSIONS AND AMBITIONS
Insurance Europe’s broad geographical footprint, a good balance
between mature and growth markets, coupled with its ability to
contain expenses, increase efficiency and standardise products and
operations, will help it continue to grow the business.
In light of the decision to split ING Group and separate the
insurance and investment management business from the banking
activities, the short-term goal is to strengthen the profitability of
the insurance and investment management businesses by
continuing to reduce costs, investing in top-line growth and making
the best use of our talent. Our long-term goal is to strengthen our
insurance and investment management businesses further as
world-class players.
1.2 Report of the Executive Board
ING Group Annual Report 2009
40