Company analysis

Twenty years to build, four years to dismantle

ING Groups plan to dismantle its sprawling insurance empire marks the end of one of the grandest fully integrated bancassurance models and one executed by a company that was from the start a bancassurer.ING Groups creation was facilitated by the Dutch governments lifting of legal restrictions on mergers between insurers and banks in 1990, a development that prompted merger negotiations between Dutch insurer Nationale-Nederlanden and Dutch bank NMB Postbank Groep.The negotiations culminated in 1991 in formation of Internationale Nederlanden Groep, a name later changed to ING Groep NV.From its roots as a Dutch company with limited international business, ING rapidly spread globally via organic growth such as creation of online bank ING Direct and acquisitions.INGs first large acquisition was in the banking industry and came in 1995 when in a move that gave its brand instant global recognition it took over UK merchant bank Barings for a token £1 following its collapse.INGs first major insurance acquisition came in 1997 with the acquisition of US insurer Equitable of Iowa.This was INGs largest acquisition since its founding and ramped-up its premium income in the US from $2.2 billion to $4.3 billion and assets under management from $10 billion to $20 billion.Acquisition of Equitable of Iowa built on a US-base established by Nationale-Nederlanden which had in 1979 acquired Life of Georgia.Another major push into the US market followed in 2000 when INGs acquired US insurers Aetnas non-health care US business and it international businesses for $7.7 billion

StaffordThomas November 3, 2009

ING Group’s plan to dismantle its sprawling insurance empire
marks the end of one of the grandest fully integrated bancassurance
models and one executed by a company that was from the start a
bancassurer.

ING Group’s creation was facilitated by the Dutch government’s
lifting of legal restrictions on mergers between insurers and banks
in 1990, a development that prompted merger negotiations between
Dutch insurer Nationale-Nederlanden and Dutch bank NMB Postbank
Groep.

The negotiations culminated in 1991 in formation of Internationale
Nederlanden Groep, a name later changed to ING Groep NV.

From its roots as a Dutch company with limited international
business, ING rapidly spread globally via organic growth such as
creation of online bank ING Direct and acquisitions.

ING’s first large acquisition was in the banking industry and came
in 1995 when in a move that gave its brand instant global
recognition it took over UK merchant bank Barings for a token £1
following its collapse.

ING’s first major insurance acquisition came in 1997 with the
acquisition of US insurer Equitable of Iowa.

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This was ING’s largest acquisition since its founding and ramped-up
its premium income in the US from $2.2 billion to $4.3 billion and
assets under management from $10 billion to $20 billion.

Acquisition of Equitable of Iowa built on a US-base established by
Nationale-Nederlanden which had in 1979 acquired Life of
Georgia.

Another major push into the US market followed in 2000 when ING’s
acquired US insurer’s Aetna’s non-health care US business and it
international businesses for $7.7 billion. This acquisition boosted
ING into top position in the US based on life and annuity
premiums.

Aetna’s international business significantly increased ING’s scale
in Latin America, bringing with it 13.6 million clients in
Argentina, Brazil, Chile, Mexico, Peru, and Colombia. In the
Asia-Pacific region a total of 3.4 million clients were added in
countries including Taiwan, Malaysia, Japan, and Korea.

Acquisitions and grassroots developments such as ING’s joint
ventures in India (ING Vysya Life) and China (Pacific Antai Life
and ING Capital Life) left the bancassurer with 42 principal
insurance subsidiaries worldwide at the end of 2008 and total
insurance assets of €304 billion ($448 billion).

ING’s divestment programme calls for all these subsidiaries to be
off its balance sheet by 2013, a strategy that assumes that there
will be eager buyers for its insurance businesses. This is an
assumption that another company committed to repaying billions of
dollars in state assistance, American International Group, has
found to be far from reliable.