ING Direct 2008 Annual Report Download - page 131

Included in Changes in the composition of the group in 2007 is EUR 4,017 million relating to the disposal of portfolios in connection with the
sale of the Belgian broker and employee benefit insurance business as disclosed in Note 29 ‘Companies acquired and companies disposed’.
Where discounting is used in the calculation of life insurance provisions, the rate is within the range 3.1% to 6.0% (2007: 2.9% to 6.0%)
based on weighted averages.
Insurance provisions include a provision for the estimated cost of the agreement with regard to unit-linked policies. For more information
reference is made to Note 30 ‘Legal proceedings’.
ING transferred part of its life insurance business to Scottish Re in 2004 by means of a co-insurance contract. This business continues to
be included in Life insurance provisions. The related asset from the co-insurance contract is recognised under Reinsurance contracts. 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.
To the extent that the assuming reinsurers are unable to meet their obligations, the Group remains liable to its policyholders for the
portion reinsured. Consequently, provisions are made for receivables on reinsurance contracts which are deemed uncollectible. The life
reinsurance market is highly concentrated and, therefore, diversification of exposure is inherently difficult. To minimise its exposure to
significant losses from reinsurer insolvencies, the Group evaluates the financial condition of its reinsurers and monitors concentrations of
credit risk arising from similar geographical regions, activities or economic characteristics of the reinsurer. Reference is also made to the
‘Risk management’ section.
As at 31 December 2008, the total Reinsurance exposure, including Reinsurance contracts and Receivables from reinsurers (presented
in Other assets) amounted to EUR 6,539 million (2007: EUR 7,044 million) after the provision for uncollectible reinsurance of nil (2007:
EUR 5 million).
Changes in provision for unearned premiums and unexpired risks
Provision net of reinsurance Reinsurance contracts
Insurance and
investment contracts
2008 2007 2008 2007 2008 2007
Opening balance 2,614 2,631 99 156 2,713 2,787
Changes in the composition of the group –643 –194 –93 3–736 –191
1,971 2,437 6159 1,977 2,596
Premiums written 4,747 5,780 196 306 4,943 6,086
Premiums earned during the year –4,719 –5,701 –190 –326 –4,909 –6,027
Exchange rate differences –231 15 –1 –10 –232 5
Other changes –12 83 2–30 –10 53
Closing balance 1,756 2,614 13 99 1,769 2,713
Changes in claims provisions
Provision net of reinsurance Reinsurance contracts
Insurance and
investment contracts
2008 2007 2008 2007 2008 2007
Opening balance 6,172 6,651 475 600 6,647 7, 251
Changes in the composition of the group –401 –667 –135 –18 –536 –685
5,771 5,984 340 582 6,111 6,566
Additions
– for the current year 2,934 3,356 –93 78 2,841 3,434
– for prior years –322 –282 –12 14 –334 –268
– interest accrual of provision 30 32 30 32
2,642 3,106 –105 92 2,537 3,19 8
Claim settlements and claim settlement costs
– for the current year 1,399 1,747 8–42 1,407 1,705
– for prior years 1,209 1,343 18 151 1,227 1,494
2,608 3,090 26 109 2,634 3,199
Exchange rate differences –407 84 –26 –14 –433 70
Other changes –58 88 19 –76 –39 12
Closing balance 5,340 6,172 202 475 5,542 6,647
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ING Group Annual Report 2008