ING Canada seeking future acquistions

Following its recent acquisition of Allianz, ING Canada is seeking further opportunities to expand, ING Canada president and CEO Claude Dussault told an annual general meeting of the company’s shareholders recently.”With the acquisition of Allianz, ING Canada solidified its leading share of the property and casualty market,” Dussault said in the text of a speech delivered during the company’s May 1 AGM. “The industry remains highly fragmented. The top five companies have an estimated 36% share of the market, with the remainder dispersed among 100 insurance groups. When compared to other financial services such as banking and life insurance, we believe there is considerable room in our industry for consolidation.”As part of our medium and long-term growth plan, we intend to be an acquirer and play a role in the consolidation process, in a way that would create value for shareholders.”Dussault made his remarks in the context of making observations about the company’s 2005 financial performance. He noted ING Canada’s combined ratio in 2005 of 86% matched that of the company’s combined ratio in 2004. The company’s ROE in 2005 was 31.6%, which Dussault described as “slightly below the level of 2004,” but “very strong and significantly higher than average historical levels.”The strength of ING Canada’s auto insurance portfolio offset higher-then-usual property claims resulting from increased storm activity, Dussault said.”Among the key drivers of underwriting results last year was the continued profitability of automobile insurance,” he said. “While overall premiums declined, regulatory reforms have succeeded in stabilizing costs. We believe that the low frequency rates that we have experienced will either increase or lead to further rate reductions. The sustainability of reforms will also be a driver of profitability this year.”In commercial insurance, Dussault noted, “competition continues to grow, which is putting downward pressure on prices. Rising non-residential reconstruction costs are also affecting profitability, but overall, we are expecting commercial insurance results to remain above historical levels.”A higher severity of claims is affecting the home insurance portfolio, he added. “As in the case of commercial insurance, our brokers are working closely with clients to ensure they maintain the right level of coverage and adapt coverage to changes in risk.”