ING Direct 2011 Annual Report Download - page 52

increased 7.2% compared to 2010, due to successful new product
launches and improvements in multi-distribution and the tied
agency channel. APE growth in Poland was 9.2%, in Romania
10.0%, in the Czech Republic 17.2%, in Slovakia 17.5%, and in
Hungary it was 24.7%, due to a short-term savings-based insurance
product. The regional increase was offset by 10.4% lower pension
sales compared to 2010, reflecting the regulatory changes for
pension funds in Poland and Hungary. Despite this, there was APE
growth in pensions in some markets including Bulgaria (+25.1%),
Turkey (+34.4%) and Romania (+159.4%).
BUSINESS DEVELOPMENTS
Insurance CRE operates in a market of approximately 220 million
people with relatively low penetration rates for life insurance and
pensions. It has businesses in Poland, Hungary, the Czech Republic,
Slovakia, Romania, Bulgaria, Greece, Turkey and Spain. In 2011,
market conditions in the region improved in some countries, but
in other countries such as Greece and Spain, the macroeconomic
environment remained very challenging.
Business activity in 2011 was affected by regulatory changes in the
region’s major pension markets such as Hungary and Poland. As a
result Insurance CRE concentrated on increasing life insurance sales
in the region, and pension business in specific markets.
Growth
The priorities for the business are achieving growth and containing
costs. To grow the portfolio, Insurance CRE concentrated on further
improving the customer experience through programmes such as
the Net Promoter Score (NPS) and developing long-term customer
relationships. It also focused on broadening its distribution base
and strengthening its main distribution channel: the tied agent
sales force. Tied agents remain the dominant distribution channel,
but bancassurance and brokers are increasing in number and
importance. In the bancassurance channel, new distribution
agreements were signed with Raiffeisen Bank and Alior Bank in
Poland.
Sales via the broker channel grew by double digits in the Czech
Republic following the successful introduction of the Smart
product, a unit-linked life insurance product. In Slovakia, ING
launched a similar product. In Turkey, new business from the broker
channel accounted for half of all new business.
The Tied Agency Overhaul Programme, which began in 2010 to
improve the performance of tied agents, continued in many
countries in 2011 including Spain, Romania, Hungary and Poland.
InSpain, where the programme was first introduced, there was
asubstantial increase in productivity among agents who were
included in the overhaul initiatives. In Poland, the introduction of
anew structure and distribution model resulted in a significant
increase in agent productivity.
Employee benefit markets recorded growth particularly in Spain,
but also in Poland, the Czech Republic and Slovakia. In some
countries in the Central and Rest of Europe region, the downsizing
of the public sector, particularly in healthcare and pensions,
together with the growth in the number of small and medium-
sized enterprises (SME) mean the employee benefits business has
solid growth prospects.
Operational refinement
Insurance Central and Rest of Europe has put in place a regional IT
organisation. The goal of the organisation is to deliver cost-effective
and high-quality regional IT services mainly for IT infrastructure and
for cross-border programmes such as Solvency II. The regional IT
hub is based in Prague and will expand gradually, providing IT
services to all insurance businesses in CRE.
A comprehensive analysis of underwriting processes was
conductedon a regional level. It has led to the implementation
ofimprovements to standardise and simplify processes, such as
streamlining medical tests and improved medical application forms.
All ING’s insurance businesses in the region shared best practices
and continued towork on improving processes and IT, especially
with regard to the region’s priority to achieve growth, further
improve the customer experience and broaden the distribution
base. This resulted in, among other initiatives, improved portals in
Romania with new functionality for customers and agents in the
portfolio overview; electronic claims registration over the internet;
electronic applications for changes to agent contracts in the Czech
Republic; more efficient processes for welcome calls; and SMS and
email progressively replacing letters and paper in some customer
services in Spain.
Awards
ING CRE continually strives to improve customer satisfaction by
incorporating customer feedback from the NPS programme in new
products and services. In 2011, many businesses in the region were
awarded prizes and special mentions in recognition of their
customer-centric focus. ING’s Smart life insurance product was
considered to be the most transparent as well as the most
innovative product in Slovakia in a study by market research
company Market Vision, which specialises in competitive market
intelligence in the region. In the Czech Republic, the Smart product
won the Best Insurance Product of the Year 2011 in the Fincentrum
Bank of the Year awards. Fincentrum is one of the Czech Republic’s
largest financial advice companies. In Poland, ING was awarded the
“Friendly Life Insurance Company” title for the second year in a
row by leading financial publication Gazeta Bankowa. The award
recognises excellence in quality of service including claims handling
and payouts.
CONCLUSIONS AND AMBITIONS
ING CRE expects continued growth in the region’s life insurance
and savings markets, but changes to pension regulations in several
countries remain a concern and could dampen growth in the
short-term. The businesses in the region will continue to improve
the customer experience and customer retention levels as well as
developing multiple distribution channels and pursuing product
innovation to meet changing consumer demands. There will be
continued focus on driving policy costs lower by building more
scale while keeping expenses under control. Although the
economic climate and regulatory environment remain uncertain,
ING’s leading positions and strong reputation in the marketplace
augur well.
50 ING Group Annual Report 2011
Insurance continued