Strong financial position with $428 million in excess capital and no debt
Continuing equity market weakness led to $186 million in impairments on common shares
(in millions of dollars, except as otherwise noted)
Direct Premiums Written (excluding pools)
Net Operating Income2
Net Operating Income Per Share
Net Income (loss)
Net Income Per Share ($)
Basic and Diluted
Return on Equity - last 12 months
Combined Ratio (excluding MYA)
- Net operating income, which is defined as the sum of underwriting income, interest and dividend income and corporate income after tax, declined 35.5% to $75.1 million during the quarter as a result of lower underwriting results and investment income. For the year, net operating income was $360.7 million, down from the previous year, mainly as a result of the impact of the severe storms that prevailed during the year.
- Direct premiums written increased marginally to $968.2 million in the quarter and $4,145.5 million for the year. The slow pace of growth reflects our continued pricing discipline in both personal and commercial lines.
- Underwriting income, excluding the market yield adjustment, declined during the quarter to $11.0 million as a result of a 5.7 percentage point increase in the combined ratio to 98.9%. Our business insurance portfolio continued to improve during the quarter with a 78.7% combined ratio and underwriting income of $57.8 million, up 36.6%. Personal auto insurance results, which improved in the last quarter, deteriorated in the current quarter with an overall combined ratio of 102.9%. Lower favourable prior year claims development than the corresponding period of last year and a higher average cost of claims led to an underwriting loss of $14.8 million in personal auto. Home insurance results were severely impacted by the weather conditions that prevailed in the last two weeks of the year. Overall, the combined ratio of our home insurance business was 114.1%, resulting in a loss of $32.0 million.
For the year, underwriting income declined by $72.1 million to $117.0 million as a result of a $73.7 million increase in the costs of claims associated with severe storms that took place throughout the year. The combined ratio for the year was 97.1% up 1.9 percentage points.
- Interest and dividend income, net of expenses decreased 9.5% during the quarter to
$78.3 million and 4.6% for the year to $328.8 million. The decline reflects lower returns on fixed income investments as well the reduction of the size of our equity portfolio.
- Net losses on invested assets, excluding held-for-trading debt securities, totalled $194.2 million, compared to $19.0 million last year. The losses reflect impairments to the common equity portfolio as a result of the prolonged decline of the Canadian stock market and the level of uncertainty about its recovery. Impairments do not have an impact on either the regulatory minimum capital or the excess capital position of the company since these measures already take into consideration the market value of all assets. For the year, the net losses amounted to $316.4 million compared to a gain of $94.6 million the previous year.
The common share portfolio was reduced by $249 million and the proceeds were reinvested in Canadian government T-Bills as well as dividend and interest income received during the quarter. These actions reduced the risk level associated with the company’s investment portfolio and benefited the MCT ratio as capital markets continued to deteriorate late during the year.
The average estimate of earnings per share and operating earnings per share for the fourth quarter among the analysts that follow the company were $0.48 and $0.73 respectively.
ING Canada will host a conference call to review its earnings results at 11:00 a.m. ET. To listen to the call via live audio webcast and to view the presentation slides, the statistical supplement and other information not included in this press release, visit our website at www.ingcanada.com and click on “Investor Relations”.
The conference call is also available by dialling 416-644-3416 or 1-800-732-9307 (toll-free in North America). Please call ten minutes before the start of the call.
A replay of the call will be available at 2:30 p.m. ET today through 11:59 p.m. ET on Tuesday, February 3rd. To listen to the replay, call 416-640-1917 or 1-877-289-8525 (toll-free in North America). The passcode is 21296087#. A transcript of the call will also be available on ING Canada’s website.
About ING Canada
ING Canada offers automobile, property and liability insurance to individuals and businesses through its insurance subsidiaries. It is the largest provider of property and casualty insurance in the country with more than $4 billion in direct premiums written.
Vice President - Corporate Communications
Vice President – Investor Relations
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