ING Direct 2002 Annual Report Download - page 40

Annual Report 2002 · ING Group 37
ING Americas
its SmartDesign multi-rate Index Annuity. The
product was named ‘Index Annuity Product
Innovation of the Year’ by the Advantage
Group, a leading provider of indexed annuity
research and consulting services to insurance
companies and financial services firms.
ING also developed a fee-based advice
service called Financial Horizons Advisory
Program to meet the increased demand for
independent financial and investment advice in
the current market uncertainty and to capture
a larger share of retirees’ roll-over and payout
business into ING’s own or other third parties’
retirement annuities and mutual fund
products.
Cross-selling with ING Direct
Steps began in 2002 to intensify co-operation
between the retail businesses in North America
and ING Direct. In Canada, ING’s intermediaries
sold EUR 28 million in bank deposits and added
3,500 clients to ING Direct’s client base. In the
US, a pilot has started whereby ING Direct is
selling the US mutual funds. ING Direct’s core
savings account is also being sold by some of
ING’s USFS distribution channels.
ING Life of Georgia settled class-
action suit
In early 2002, ING’s US subsidiaries Life
Insurance Company of Georgia and Southland
Life Insurance Company (United States) reached
a settlement with plaintiffs in a class-action
lawsuit valued at approximately USD 65 million.
The lawsuit involved allegations of historical
underwriting practices that took into account
differences in life expectancy of different races.
Life of Georgia and Southland are in the process
of implementing the settlement. A number of
class members chose to opt out of the settle-
ment to pursue their individual claims. The
companies are vigorously defending these
cases.
Outlook
Looking ahead to 2003, ING Americas’ business
will continue to be challenged by external
factors. These include market volatility in the US
and political and economic uncertainty in Latin
America. Performance in the coming year will be
largely dependent on how well the equity and
credit markets improve. Performance will also
be determined by how well ING Americas
balances its product mix and reduces its cost
base. The retail and worksite business portfolio
in the US is highly dependent on the ups and
downs of the Standard & Poor’s index with about
half of the customers’ separate account assets
invested in equities. In 2003, efforts continue to
be made to introduce greater diversity in the
product mix in order to reduce the volatility of
the portfolio.
In 2003 there will be more active
monitoring of ING Americas’ business performance
to ensure the region is delivering a proper
return on capital deployed. Benchmarks that will
play a more central role are net earnings,
efficiency, internal rate of return on new
business and return on equity. There will also be
close monitoring to track the quality of
customer service.
The priorities in 2003 will also include
expense reduction and improved profitability.
As part of this effort, aggressive portfolio
management will continue in order to properly
address underperforming or non-core businesses.
There will also be a greater focus on improving
operational efficiency, particularly in the IT area.
The alignment of IIM in the ING Americas
organisation will require a major effort in 2003.
Other priorities include completing the final
projects in the integration of Aetna and
ReliaStar and optimising the operations/IT infra-
structure. Over the last few years, ING Americas
has been involved in a sweeping integration
effort in the area of operations/IT aimed at stream-
lining the complex and highly fragmented back
office organisation it inherited. These projects
are almost complete and will position ING
Americas for better customer service and structural
cost savings. Restoring ING’s position in individual
life insurance in the US to a top-five position will
deserve attention in 2003, and a strategic review
of the reinsurance business will also take place.
 
Co-operation with ING
Direct intensified
—
Life of Georgia suit settled
—
External factors will
continue to determine
performance of ING
Americas
—
Priorities: capital and
operational efficiency,
portfolio management and
revenue enhancement