ING Direct 2009 Annual Report Download - page 184

Profit sharing and rebates
2009 2008 2007
Distributions on account of interest
or underwriting results 682 –576 –133
Bonuses added to policies 289 131 411
Deferred profit sharing expense 58 29 146
1,029 –416 424
The total Cost of acquiring insurance business (life and non-life) and investment contracts amounted to EUR 643 million (2008: EUR 2,628
million; 2007: EUR 2,096 million). This includes amortisation and unlocking of DAC of EUR 458 million (2008: EUR 2,026 million; 2007:
EUR 1,552 million) and the net amount of commissions paid of EUR 1,815 million (2008: EUR 3,273 million; 2007: EUR 3,598 million) and
commissions capitalised in DAC of EUR 1,630 million (2008: EUR 2,671 million; 2007: EUR 3,054 million).
The total amount of commission paid and payable with regard to the insurance operations amounted to EUR 2,483 million (2008: EUR
3,804 million; 2007: EUR 4,275 million). This includes the commissions recognised in Cost of acquiring insurance business of EUR 1,815
million (2008: EUR 3,273 million; 2007: EUR 3,598 million) referred to above and commissions recognised in Other underwriting
expenditure of EUR 668 million (2008: EUR 531 million; 2007: EUR 677 million). Other underwriting expenditure also includes reinsurance
commissions received of EUR 255 million (2008: EUR 306 million; 2007: EUR 350 million).
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 343 million in 2009. These assumptions were updated to reflect lower-than-expected
surrenders on policies where the value of the benefit guarantees is significant.
The Change in life insurance provisions for risk of company includes an amount of nil in 2009 (2008: EUR 136 million; 2007: EUR 110
million) in relation to reserve strengthening for Insurance Asia/Pacific as described in further detail under Segment reporting. The 2009
amount is nil following the disposal of ING Life Taiwan.
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 2009 was EUR 13 million (2008:
EUR 12 million; 2007: EUR 15 million). The cumulative amortisation as at 31 December 2009 was EUR 107 million (2008: EUR 96 million;
2007: EUR 81 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.
44 INTANGIBLE AMORTISATION AND OTHER IMPAIRMENTS
Intangible amortisation and (reversals of) impairments
Impairment losses Reversals of impairments Total
2009 2008 2007 2009 2008 2007 2009 2008 2007
Property and equipment 819 2–12 –14 –4 19 –12
Property held for sale (development projects) 450 93 41 –7 –31 –43 443 62 –2
Goodwill 155 155
Software and other intangible assets 971 15 9 71 15
Other –4 –4
(Reversals of) other impairments 467 338 58 –19 –31 –61 448 307 –3
Amortisation of other intangible assets 120 157 18
568 464 15
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.
The impairments on Property held for sale (development projects) are recognised on a large number of Real Estate development projects
in Europe, Australia (Waterfront City project) and the US. 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.
Amortisation of intangible assets relates to intangible assets recognised as part of companies acquired. Until 2007, these were classified
in Other operating expenses. The comparatives for 2007 have been amended to reflect the revised presentation. There is no impact on
Total expenses.
2.1 Consolidated annual accounts
ING Group Annual Report 2009
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Notes to the consolidated profit and loss account of ING Group (continued)