ING Attracting New Policyholders with Split Insurance Division

Published: Thu 19 Nov 2009

Wendy Blair - Contributing Writer

The decision of the ING Group to split its insurance unit off from the rest of the business is attracting an unexpected amount of interest, and a final decision on the business and insurance units may come as soon as the end of 2009 according to a statement made Wednesday by ING's chief executive.

Originally, ING claimed that the divestiture of the insurance unit would be completed within four years. However, Wednesday's remarks tell a different story, suggesting a much faster timeline. Chief Executive Officer Jan Hommen stated that he would be in a position to deliver an announcement about the split after a shareholders' meeting on November 25.

"We will develop a clear path as to how we will go forward in separating the bank and the insurance company and determine how they both will go their own way and in what form that will be done," Hommen said. "Now, that will take place sometime, let's say, in late December, early January. And I hope quickly to be able to announce what the plans are to go forward."

The Dutch financial services and insurance company revealed plans to separate its insurance and banking units on October 26. The plan included the eventual relinquishment of the insurance business altogether.

If ING does abandon the insurance business, it would then have to sell or publicly offer its insurance operations, which are the sixth-largest in the world.

"We have great people in our organization who are, of course, eager to hear what the decisions are that we will make. They deserve to know quickly what those decisions are," said Hommen.

Potential buyers of ING's insurance division have already begun to come out of the woodwork. Aviva, the fifth-largest insurer in the world, has already expressed interest in buying ING's insurance unit.

Hommen's remarks came on the heels of a report that both ING's insurance and banking businesses were profitable once again in the third quarter of this year. As a whole, ING reported a profit of $1.16 billion, contrasted with $343 million in the second quarter and an $850 million loss in the third quarter of 2008.

The banking unit of ING reported a profit of $395 million in the third quarter, compared with a loss of $37 million in the previous quarter. The insurance unit reported a $769 million profit in the third quarter, vs. a $380 million profit in the second quarter.