ING Direct 2011 Annual Report Download - page 193

Notes to the consolidated annual accounts of ING Group continued
ING has completed a separate annual review of the policyholder behaviour assumptions for the VA Japan business, which has not resulted
inmaterial adjustments.
In 2010, the Change in life insurance provisions for risk of company includes an amount related to variable annuity assumption changes in the
United States and Japan of approximately EUR 356 million (2009: EUR 343 million). These assumptions were updated to reflect lower-than-
expected surrenders on policies where the value of the benefit guarantees is significant.
Other underwriting expenditure from life underwriting in 2010 includes a EUR 975 million DAC write-off as explained in Note 51
‘Operatingsegments’.
ING Group transferred part of its life insurance business to Scottish Re in 2004 by means of a co-insurance contract. A loss amounting to
EUR160 million was recognised in Underwriting expenditure in 2004 on this transaction. This loss represented the reduction of the related
deferred acquisition costs. In addition, an amount of EUR 240 million is being amortised over the life of the underlying business, starting in
2005 and gradually decreasing in subsequent years as the business tails off. The amount amortised in 2011 was EUR 14 million (2010: EUR 17
million; 2009: EUR 13 million). The cumulative amortisation as at 31 December 2011 was EUR 151 million (2010: EUR 132 million; 2009: EUR
107 million). On 23 January 2009, Hannover Re and Scottish Re announced that Hannover Re has agreed to assume the ING individual life
reinsurance business originally transferred to Scottish Re in 2004.
ING Group transferred its US group reinsurance business to Reinsurance Group of America Inc. in 2010 by means of a reinsurance agreement.
The transaction resulted in EUR 70 million ceding commission which is required to be recorded as a deferred gain and amortised over the life
of the underlying business, starting in 2010 and gradually decreasing in subsequent years as the business tails off. The amount amortised in
2011 was EUR 16 million (2010: EUR 52 million). The cumulative amortisation as at 31 December 2011 was EUR 69 million (2010:EUR 52
million).
44 INTANGIBLE AMORTISATION AND OTHER IMPAIRMENTS
Intangible amortisation and (reversals of) impairments
Impairment losses Reversals of impairments Total
2011 2010 2009 2011 2010 2009 2011 2010 2009
Property and equipment 30 28 8–11 –5 –12 19 23 –4
Property development 216 400 450 –7 216 400 443
Goodwill 32 540 32 540
Software and other intangible
assets 50 31 9 50 31 9
(Reversals of) other impairments 328 999 467 –11 –5 –19 317 994 448
Amortisation of other
intangibleassets 62 76 76
379 1,070 524
In 2011, impairments are recognised on Property development (in the segment ING Real Estate) due to the sale or termination of large
projects in Germany and the Netherlands and on the reassessment of Dutch and Spanish real estate development projects.
In 2011, a goodwill impairment of EUR 32 million (2010: EUR 540 million) is recognised. Reference is made to Note 9 ‘Intangible assets’.
In 2010, impairments on Property development are recognised on a large number of Real Estate development projects in The Netherlands,
Spain and the United States. The unfavourable economic circumstances in all regions resulted in lower expected sales prices.
In 2009, impairments on Property development are recognised on a large number of Real Estate development projects in Europe, Australia
and the United States. Circumstances that have led to these impairments are unfavourable economic circumstances in all regions that have
resulted into lower expected sales prices, changes in strategy of ING Real Estate Development whereby certain projects are not developed
further and operational inefficiencies in a limited number of projects.
Impairments on Loans and advances to customers are presented under Addition to loan loss provision. Impairments on investments are
presented under Investment income. Reference is made to the ‘Risk management’ section for further information on impairments.
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
191ING Group Annual Report 2011