ING has reported an insurance underlying loss before tax was E 1,348m in 4Q11, mainly reflecting the previously announced charge for the US Closed Block Variable Annuity(VA) assumption changes, as well as losses on hedges in place to protect regulatory capital. The operating result rose 20.4% from 4Q10 to E478m driven by a higher investment margin, a decline in expenses and lower interest costs. The investment spread rose to 106 bps fuelled primarily by the Benelux.
Jan Hommen, ceo of ING Group, comments “Our insurance results were severely impacted by the update to policyholder behaviour assumptions on the US Closed Block VA, as announced in December, as well as losses on hedges in place to protect regulatory capital given the ongoing market turmoil. These factors led to a fourth-quarter loss on an underlying basis. However, operating results were up 20.4% from a year ago, demonstrating cost discipline and strong progress on performance improvement programmes. Significant milestones in the restructuring process were achieved in 2011, including the sale of Insurance Latin America and the completion of the legal and operational separation of Insurance US, Europe and Asia. In 2012, we will continue to focus on improving returns while preparing these businesses for stand-alone futures."
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