Americas Reports 24% Contribution to ING Group Results for First Quarter
PRNewswire-FirstCall
ATLANTA
May 23, 2002
ING Americas, part of Amsterdam- based ING Group (NYSE: ING), today reported good results for the first quarter 2002, contributing 24% to ING Group's quarterly pre-tax results which were announced earlier today in Amsterdam.
ING Americas posted pre-tax results of $320 million compared to $254 million in the first quarter of 2001. Major integration activities in the United States, Canada, Mexico and Chile, and continued cost controls have resulted in expense reductions and have advanced ING Americas' overall integration objectives.
"While we are gratified with ING Americas' results for the first quarter, we remain cautious about market and economic recovery throughout the Americas," said Glenn Hilliard, chairman and CEO of ING Americas. "Nonetheless, we believe our integrated financial services priorities for the region, coupled with tight expense management in all country markets are beginning to deliver success. And we are optimistic that we will be well positioned for competitive advantage when the economy does improve."
Country results (see currency conversion note below) in the Americas are as follows:
United States: Businesses in the United States recorded a $54 million increase in pre-tax results over the quarter a year ago primarily due to three factors: substantially improved investment yields across all product lines which were partially offset by higher impairments on bond portfolios; higher margins and inforce levels on guaranteed investment contracts; and lower financing costs and lower corporate expenses.
The first quarter marked the initial period of reporting since the U.S. businesses were reorganized in the fall of 2001 into two core operating units -- U.S. Financial Services (USFS) and U.S. Institutional Businesses (USIB). USFS is composed of individual life, annuity and mutual funds businesses, and worksite businesses (composed of defined contribution/pensions, group insurance and payout management business). USIB consists of individual and group reinsurance businesses, and guaranteed investment contracts and other funding agreements.
U.S. Financial Services -- On-target results were $236 million for the quarter, although down from $243 million in the year-ago quarter.
* Lower results were primarily due to reduced fees on declining equity
assets under management.
* Despite continued uncertainty regarding the economic and market
environment, sales of USFS products have been healthy across most
product lines. In particular, product offerings in fixed and
guaranteed performance products performed well the past few months.
For example, overall sales of mutual funds were higher, largely due to
consumer interest in principal protection funds which have become
appealing to retail customers in light of the uncertainty in equity
markets.
The integration of USFS operations continued on track, with expense reductions on target and overall sales above plan. USFS is proceeding through an integration process that is expected to take about two years to complete and will continue to benefit the region when the economy improves.
U.S. Institutional Businesses -- Results were $60 million compared to $43 million a year ago.
* Institutional Markets' first quarter sales of guaranteed investment
contracts were above expectations at $0.9 billion, although below the
prior year record amount of $1.1 billion.
* Institutional Markets results reflected an average of $2.6 billion
additional assets as compared to first quarter 2001 resulting in higher
investment income levels.
* Reinsurance premium income grew due to higher renewal premiums on a
larger inforce block of business.
The remaining favorable variance of $44 million in U.S. businesses was due to lower financing costs and corporate expense reductions.
Mexico: Results were $54 million, up from $31 million a year ago. The growth reflects ING's increased ownership to approximately 100% in Seguros Comercial America, which is now under the banner of ING Comercial America.
Expense reductions from the consolidation of Seguros Comercial America into ING in Mexico are proceeding as expected and will produce savings of $35 million for 2002.
Canada: Results for Canada's businesses were $8 million for the quarter, down from $10 million a year ago mainly due to a decrease in realized equity gains.
* Integration of the recently acquired Zurich business into ING Canada
continued on schedule in the first quarter.
South America: Results were $26 million for the quarter, down from year- ago results of $32 million, mainly due to one-time favorable items in Brazil in 2001.
* Chile's gross premiums were $6 million or 5% lower than the previous
year due to lower sales in annuities. The overall market slowed as
customers awaited an increase in interest rates.
* Results for Peru were $9 million, a 24% increase over prior year
reflecting strong pension sales.
* Argentina's economic crisis continues to be watched closely although
the financial risk of the insurance operations is limited.
Late in the first quarter, ING announced that it had strengthened its partnership with a 49 percent interest in Sul America S.A., one of Brazil's largest insurers. The transaction, which closed May 10, sets the stage for a broader risk management business and will allow ING to build a wealth management platform in this lucrative South American marketplace.
Currency conversion note: All prior-year pre-tax income figures are converted using historical currency exchange rates.
Certain of the statements contained in this release are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements due to, among other things, (I) general economic conditions, in particular economic conditions in ING's core markets, (II) performance of financial markets, including emerging markets, (III) the frequency and severity of insured loss events, (IV) mortality and morbidity levels and trends, (V) persistency levels, (VI) interest rate levels, (VII) currency exchange rates, (VIII) general competitive factors, (IX) changes in laws and regulations, and (X) changes in the policies of governments and/or regulatory authorities. ING assumes no obligation to update any forward-looking information contained in this release.
SOURCE: ING Americas
Contact: Dianne Bernez, +1-770-618-3910, or Frank Ranew,
+1-770-980-4863, both of ING Americas
Website: http://www.ing-usa.com/