ING Direct 2006 Annual Report Download - page 18

Insurance continued
Profi t and loss account (underlying)
in EUR million 2006 2005 change
Premium income 24,118 22,693 6.3%
Operating expenses 2,490 2,380 4.6%
Underlying profi t before tax 1,992 1,979 0.7%
Total profi t before tax* 1,992 1,941 2.6%
* Total profi t before tax is defi ned as profi t before tax including
divestments and special items.
“ Insurance Americas recorded solid growth by
meeting customers’ needs with high-quality
products and good service, delivered through
multiple distribution channels.”
Tom McInerney, Executive Board member
responsible for Insurance Americas
Insurance Americas
Our performance
continued
In 2006, ING Insurance Americas
achieved a record profi t for the fourth
consecutive year. Although business
conditions were challenging, strong
growth in United States Retirement
Services and Annuities helped produce
an improved result.
Underlying profi t before tax for Insurance
Americas increased 0.7% to EUR 1,992
million in a rising interest rate environment
which resulted in investment-related losses
on fi xed-income investments as bonds
were traded to reposition the portfolio.
Premium income at Insurance Americas
showed continued growth in 2006, rising
6.3% to EUR 24,118 million and driven by
higher premium from both life and non-
life businesses in the region: life premium
income increased 6.2% to EUR 19,816
million whilst non-life premium increased
6.5% to EUR 4,302 million in 2006.
Operating expenses increased 4.6% to
EUR 2,490 million, primarily due to normal
business growth and an increase in the
number of sales agents in the competitive
pension business in Mexico. Insurance
Americas remained focused on profi table
growth and value creation with embedded
value profi t tripling to EUR 546 million,
largely driven by strong equity markets.
Growth in the US and Canada
A major strategic realignment of US
Financial Services was announced to enable
the businesses to better harness the strong
growth opportunities arising from the large
number of baby boomers approaching
retirement. Retirement Services and
$ 300 million
Annuities were brought together in a new
Wealth Management division. United
States Individual Life, Group Life and Group
Reinsurance businesses were combined in
the US Insurance division to better leverage
risk management skills across the United
States. ING Canada remains the number
one property & casualty insurer in Canada
in both premiums and profi ts.
Customer centricity
A major advertising campaign ‘Your
future. Made easier.’ began early in the
year, designed to draw attention to the
considerable initiatives ING has undertaken
to make insurance, saving, investing and
managing money easier. The campaign
was in response to consumer research,
which showed that Americans wanted
the process of managing their money to
be made simpler.
Execution/operational effi ciency
The United States completed its fi rst full
year using the Six Sigma methodology to
better meet customer needs and improve
effi ciency. Mexico began its Six Sigma
efforts in 2006 and has already seen
improvement in its claims processing.
Looking ahead
Meeting the growing fi nancial needs of
the ageing baby boomer generation in the
Americas will provide an unprecedented
opportunity for ING, which has the
products, services and expertise to
grow retirement assets and to provide
guaranteed lifetime incomes. ING remains
committed to allocating resources to
businesses that provide the best long-term
sustainable growth potential in the region.
The City of San Jose in California put its
retirement services plan for employees out
to bid in 2006, seeking to reap the benefi ts
of having a single provider. The City had
previously used multiple providers, as many
large cities and states do. ING’s established
relationship with the City since 1982 and our
proven capabilities in fi nancial services led to
ING winning the bid. San Jose added USD 300
million new assets to the USD 200 million we
already manage for the City.
ING Group Annual Review 200616