ING Direct 2009 Annual Report Download - page 208

ING Group
The table below shows the Earnings at Risk and Capital at Risk figures per line of business. The levels shown are undiversified levels for
ING Bank and ING Insurance, meaning that the diversification between Bank and Insurance is not yet included in these figures. This
diversification benefit is shown separately. The row ‘Bank-Insurance diversification %’ shows the diversification benefit derived from
combining the Bank and Insurance CaR figures for each risk type into a Group CaR figure for each risk type. This presentation format
differs from the format in the 2008 annual report and as such the figures are different from those shown last year. Since this is only a
different representation the final figure for ING Group has not changed.
Capital at Risk and Earnings at Risk by Line of Business (Group diversified)
Earnings at Risk Capital at Risk
2009 2008 2009 2008
Commercial Banking 2,186 2,310 2,238 2,752
Retail Banking 1,124 788 1,747 1,365
ING Direct 565 558 1,575 1,143
Corporate Line Bank 120 110 1,240 513
Line of Business diversification % Bank 12% 11% 17% 12%
ING Bank 3,505 3,367 5,673 5,097
Insurance Americas 1,738 790 3,812 2,467
Insurance Asia/Pacific 232 250 678 1,038
Insurance Europe 718 655 1,593 1,278
Corporate Line Insurance 134 208 768 782
Line of Business diversification % Insurance 20% 20% 18% 24%
ING Insurance 2,269 1,519 5,609 4,226
Bank-Insurance diversification % 7% 12% 18% 12%
ING Group 5,371 4,313 9,240 8,223
Bank-Insurance diversification for EaR decreased from 12% to 7% because the credit risk component increased. Credit Risk hardly
diversifies between Bank and Insurance.
Bank-Insurance diversification for CaR increased from 12% to 18%. Main driver is the increase in off-setting positions for interest rate risk.
Economic Capital ING Group
Since 1999 ING Bank has been disclosing Economic Capital information externally, whereas ING Insurance disclosed Economic Capital
information for the first time in 2007. Although the fundamental principles are the same, ING Bank and ING Insurance Economic Capital
information is currently calculated based on (partly) separately developed models (see Model Disclosure section below) that may differ in
the calculation and aggregation approach due to different market practices and standards used in the banking and insurance industries.
ING’s Group Economic Capital is determined by applying one common aggregation approach to Bank and Insurance.
The table below shows the build up of ING Group Economic Capital. Please refer to the Bank and Insurance paragraphs below for further
explanation on the respective EC numbers.
Risk management (continued)
2.1 Consolidated annual accounts
ING Group Annual Report 2009
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