ING Direct 2009 Annual Report Download - page 48

Insurance Asia/Pacific (continued)
ING made substantial progress in managing costs and capital.
Expenses were down EUR 103 million in 2009 compared with
2008, exceeding the full-year 2009 targeted reduction of EUR 75
million. All countries contributed to the cost reduction, with the
largest contributions coming from South Korea and Japan. ING
also reduced over 1,000 full-time positions (FTEs), more than the
planned reduction of 900 FTEs for 2009, including 200 FTEs from
the cessation of the SPVA business in Japan.
Insurance Asia/Pacific took action to minimise capital consumption
and improve efficiency through active balance sheet derisking and
monitoring statutory solvency margins.
CONCLUSIONS AND AMBITIONS
Insurance Asia/Pacific continues to look to increase its sales and
profit margins and build on its existing customer base of nearly five
million. 2010 is expected to be a year of solid economic growth
in Asia. ING retains a strong footprint in Asia in life insurance and
retirement services, which is a valued franchise, and intends to take
full advantage of its opportunities in some of the most attractive
growth markets in the region to achieve its longer-term ambitions.
ING Life Japan stopped selling its existing range of SPVA products
as a derisking measure. It remains committed to the COLI business
where it has consistently maintained a market leading position
with a strong product line-up and extensive network of valuable
distribution partners. ING will continue to invest and support
growth of the COLI business in Japan as this is an attractive
business which generates a stable stream of profits. ING will
explore opportunities to expand its product offering in this
market and plans to revive its distribution relationships with
the Japanese financial institutions.
In Hong Kong, the business regained momentum in the fourth
quarter fo 2009 and has seen growth both through the tied
agency force and the bancassurance channel.
GREENFIELDS IN REST OF ASIA
In Thailand, ING introduced new bancassurance products for
distribution via TMB in which ING has a 30% share. The business
made a contribution to the region’s profit and also improved the
productivity of its agency and bancassurance channels in order
to reach scale.
India remains one of the most attractive countries in terms of
economic fundamentals. ING sees potential to grow its Life
business, particularly as the insurance market, which in 2009
underwent a period of rationalisation, regains momentum.
In China, ING conducted a strategic review of its insurance activities
and decided to focus on the growth of ING Capital Life Insurance
Company, its joint-venture with Beijing Capital Group. ING
therefore agreed to sell its 50% stake in Pacific Antai Life Insurance
Company Ltd (PALIC) to China Construction Bank (CCB).
OPERATIONAL STANDARDISATION
As part of ING’s ongoing commitment to invest in the insurance
businesses as if it were the long-term owner, Insurance Asia/Pacific
continued the roll-out of its regional operations strategy to
standardise operations in order to reduce the costs per policy. This
standardisation will enable the business units to increase efficiency
and offer the opportunity to launch product offerings across
multiple channels and markets.
BACK TO BASICS
In May 2009, market volatility led to ING’s decision to withdraw
from the SPVA market in Japan as of 31 July 2009. The in-force
book of SPVA products will continue to be serviced and
actively supported.
On 25 September 2009, ING announced the sale of its 51% equity
stakes in ING Australia and ING New Zealand to ANZ, its joint
venture partner, for EUR 1.1 billion. The transaction was completed
on 30 November 2009 generating a net profit for ING of EUR 339
million and freeing up EUR 950 million of capital. The sale of
ING Life Taiwan to Fubon Financial Holding Co. Ltd. which
was announced on 20 October 2008, was completed on
11 February 2009, releasing EUR 5.7 billion in Economic Capital.
1.2 Report of the Executive Board
ING Group Annual Report 2009
46