Insurance firm’s revenues, earnings jump 22 per cent
The Canadian insurance subsidiary of ING Groep of the Netherlands has reported a 22 per cent increase in summerquarter revenue, with a 24 per cent rise in earnings. ING Canada Inc. said yesterday its net income was $ 202.8 million or $ 1.52 per share in the July- September period, up from $ 163.6 million, $ 1.22 per share, in the year- ago quarter. Revenue was $ 1.12 billion, boosted from $ 919.7 million by last year’s acquisition of Allianz Canada. ING Canada, 70 per cent owned by ING Groep NV, said its profits were driven by strong underwriting results and higher investment income. However, underwriting income was down from a year earlier as a result of Aug. 19 storms in Ontario, heavy rain across Canada, rate reductions in auto insurance and higher commercial insurance claims.
Return on equity was 36.5 per cent in the year to Sept. 30, off from 39.6 per cent a year earlier. ING Canada said industrywide profits on auto insurance “ are likely to exceed historical levels in the next four quarters.”
It credited “ cost containment measures adopted by governments” and low claims frequency which “ will either increase or lead to further premium reductions.”
In commercial insurance lines, returns remain above historical levels, ING Canada said.
“ We still expect the industry’s top- line growth for the next 24 months to be below historical levels. . . . The underwriting results of the industry will not remain at the favourable levels experienced thus far in 2005.” However, ING Canada will “ continue to outperform the industry’s return on equity.”
Excluding the gains, ING Canada earned $ 1.15 a share, above the 91 cents analysts expected. The parent company, ING Groep, reported a 21 per cent increase in third- quarter profit as earnings at the online banking unit rose and provisions for loan losses fell. Net income climbed to 1.88 billion euros, or 86 cents a share, from 1.55 billion euros, or 73 cents, a year earlier. ING gets about half its profit from insurance, 6 per cent from online banking, 15 per cent from commercial banking and 25 per cent from corporate banking. Phone and Internet- based bank ING Direct, which has eight units in various countries, added 2.5 million customers in the first nine months of the year, for a total of about 14 million.