ING Group

ING Group is a large, diversified financial services company based in the Netherlands.

ING Group offers products and services in the areas of life insurance, annuities, retirement services, investments and banking.

In 2011, ING Group generated over $70 billion in revenue and controlled assets in excess of $1.5 trillion.

ING US serves roughly 15 million customers in the retirement, insurance and investment management markets in the United States.

The annuities offered by ING US include fixed annuities, indexed annuities and immediate annuities.

ING US annuities are offered through ING Life Insurance and Annuity Company and ING USA Annuity and Life Insurance Company.

ING Group Product Reviews
Products Offered

General Information
TypeInsurance Company
Contact Information
Address1475 Dunwoody Drive
West Chester, PA 19380

Information & Articles about ING Group

The variable annuity industry in the U.S. is highly concentrated.  Ten insurance companies generate roughly 80 percent of industry revenue, and the top 20 companies generate over 90 percent of total sales.

A meaningful signal is sent when five of the top 20 variable annuity companies announce that they are either exiting the business entirely or paring-back existing product lines.

This is exactly what has taken place over the past several months with the following companies dialing down their variable annuity exposure or pulling-out entirely:

Equity market volatility and low interest rates are the common themes running through the most or all of the retrenching decisions.  There are a few way in which high volatility and low interest rates can hurt the companies that provide variable annuities:

  • Poor equity market performance and low interest rates affect the value of guaranteed living benefits which are liabilities for the insurance company.  Poor stock market performance and low rates both increase the amount of the insurance company liability.
  • Higher volatility results in higher hedging costs.
  • Stock market performance affects the value of separate account assets which, in turn, affects fee income related to those assets under management.
  • Many return on equity (ROE) models consider capital market volatility or “beta” as a proxy for risk.  In this context, “extreme” capital market conditions create higher hurdle rates and result in lower return on equity.

MetLife’s recent investor conference call sheds some light on the return on equity issue. During the call, MetLife categorizes its product lines based by level of ROE.  There are three ROE categories: 1) greater than 15 percent; 2) 10 - 15 percent, and; 3) less than 10 percent.

Retail annuities (including variable annuities) are in the less than 10 percent ROE bucket. Included in this less than 10 percent bucket are other capital intensive business lines that require “margin improvement.”

MetLife also alludes to capital intensity and the level of economic capital required in the variable annuity business.  Economic capital refers to the amount of capital that needs to be set aside to deal with the risks in a particular line of business.  Perceived risk is high in the capital markets right now, so economic capital requirements are high as well.

The capital intensity theme was a major factor for The Hartford as well. The argument in favor of leaving the VA business was based on the notion that capital could be allocated to more flexible and less intensive areas such as property and casualty lines.

A point to consider, though, is that all of these value assessments require the assumption that capital market conditions will continue to be as extreme as they have been over the past several years.

MetLife sheds some light on the glass half full perspective when they talk about the potential leverage in their variable annuity business. Some points to consider:

  1. As of March 31, MetLife had total variable annuity liability balances of $152.1 billion.
  2. $99.9 billion of the $152.1 billion had a living benefit rider
  3. Of the $99.9 billion, $78 billion was in the form of a guaranteed minimum income benefit (GMIB) rider.
  4. 17 percent of the GMIB riders were in the money as of March 31.
  5. The GMIB net amount at risk (the additional money MetLife would need to come-up with if everyone annuitized their GMIB contract immediately) as of March 31 was $1.6 billion.
  6. If the S&P 500 were to increase by 10 percent and the yield on 10 year Treasuries increased by 1 percent, MetLife’s net amount at risk and in the money percentage would go “pretty close to 0.”
  7. Only 250 out of the 375,000 ($60 billion worth of revenue) variable annuity contracts sold by MetLife over the past 3 years have a living benefit rider that is in the money today.

It seems that recent market volatility and ultra low interest rates could be distorting the perspectives of variable annuity issuers and the perspectives of certain shareholders of these companies.

Maybe the world has entered a permanent state of high volatility and low interest rates. Then again, maybe it has not.  In any event, there is at least a possibility that current perspectives on the variable annuity business are distorted by an overemphasis on recent experience.

Sources: MetLife

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The Dutch financial services company ING Groep is preparing for an initial public offering (IPO) of its U.S. based insurance business.

The company agreed to split its banking and insurance businesses when it gained approval from the European Commission to receive government funds during the financial crisis.

ING has spent considerable time and resources addressing issues related to its U.S. variable annuity business, and the company feels that these efforts are almost complete with the business positioned well for the IPO.

The IPO is planned for 2012 but may take place in the fourth quarter of 2011 if market conditions are favorable.

The company CEO also mentioned that there is a possibility of 2 separate IPOs--one in the U.S. and one in Europe:

“While the option of one IPO remains open, we are going to prepare ourselves for a base case of two IPOs for our insurance businesses: one Europe-led IPO with solid cash flow combined with strong growth positions in developing markets, and one separate U.S.-focused IPO with a leading franchise in retirement services,” Hommen said in a statement.

Source: Bloomberg

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Adam J. Bryan is Managing Director and General Manager of the Depository Trust and Clearing Corporation’s (DTCC) Insurance &Retirement Services.

DTCC’s Insurance and Retirement business unit is the central messaging hub for annuity transactions and a partner and leader with the insurance industry in the effort to automate, standardize and centralize the processing, monitoring and reporting for insurance products.

As a utility owned by industry participants, DTCC has an exceptional position from which to affect change in the financial services industry.  Similarly, Adam Bryan is informed by a wealth of industry experience and is able to offer a unique perspective on insurance industry.



Annuity Digest:  Can you describe the DTCC’s mission? 

Adam Bryan:  Yes, our mission is to provide connectivity between insurance carriers and distributors of insurance products with the goal of completely eliminating paper and providing messaging and support services for the industry.

Annuity Digest:  What is the ownership structure of DTCC—is it an industry consortium?

Adam Bryan:  DTCC is a utility owned by industry participants.  As a user-owned and user-governed organization, DTCC operates on an “at-cost” basis, so any revenue surplus is returned to its members.

Annuity Digest:  Who, primarily, are DTCC’s clients?

Adam Bryan:  Our primary clients are product manufacturers and distributors, and our services are intended to tie them together.

Annuity Digest:  In terms of distributors, are the primary customers larger broker-dealers or would DTCC deal directly with a smaller shop? 

Adam Bryan:  Our initial services came about as a result of demand from wire-house distributors.  Currently the clearing firms and larger independents are on board.  We are currently targeting some of the smaller independents and our product development initiatives reflect this effort.

Annuity Digest:  For the purpose of analogy, are there entities comparable to DTCC in other industries?

Adam Bryan:  There really isn’t a valid analogy—our situation is quite a unique in the U.S. market.  The benefit of the DTCC structure or situation is that the cost of doing business in the U.S. is substantially lower than other world markets.

Annuity Digest:  DTCC seems to have a unique perspective on other financial services verticals.  How does the adoption and effective use of technology in other financial services sectors compare to the retirement income industry? 

Adam Bryan:  At the highest level, you can see that equity and fixed income markets are ahead of the insurance industry.  That said, the insurance industry has made significant strides over the past ten years. 

The lag between markets could be about 5-8 years.  The wire-houses came to us in 1997. In contrast, DTCC had been supporting the equity and fixed income markets since the 1970s.

The key question for the insurance industry is whether its paper-based processes can be eliminated. 

Annuity Digest:  What are some of the primary constraints or bottlenecks and related opportunities in the industry at the moment? 

Adam Bryan:  One of the hurdles involves education and ensuring that people understand the benefits of changing and why they should do something different. 

Paper is the primary hurdle.  Industry participants need to understand their exposure at any point in time to have a handle on their risks.  Paper does not allow this.  We need to help people understand the benefits of change and technology.

Annuity Digest:  What is your view on the level of consumer awareness and engagement in retirement income industry? 

Adam Bryan:  When it comes to annuities and guarantees in the retirement income space, the level of consumer awareness and understanding is not thorough enough.

Many consumers learn about retirement income products and solutions through financial advisors.  The level of consumer awareness and understanding will have to increase in light of recent events and policy priorities of current administration. 

I expect that people will be asking how do I protect my nest egg and how do I ensure adequate retirement income.  Overall, I anticipate that consumers will look for a broader level of understanding at the retail level.

Annuity Digest:  Does DTCC have any consumer-focused solutions or initiatives, or is application development left to product manufacturers and distributors? 

Adam Bryan:  We are purely business-to-business (“B2B”) and do not get involved at all at the consumer level.

Annuity Digest:  Consumer application development and publishing is common in many other financial services sectors such as real estate and personal finance, and standardized data sources play a critical role.  I am sure you saw much of this development during your time at Thomson Financial.  What role, if any, do you envision for financial services publishers in the retirement income space, and how can DTCC help enable this? 

Adam Bryan:  My opinion is that as awareness of retirement income increases you will find that the consumer publishers and application providers will develop.  There is no doubt about it as the advertising dollars are clearly there.

That said, it is still unknown how DTCC will play in this space since our current focus purely B2B.  It’s tough to say at this point how our role will evolve.

Annuity Digest:  Could a distributor or product manufacturer take your technology or data and leverage it as a platform for third-party application development to create something analogous to what is offered in Yahoo or Google Finance? 

Adam Bryan:  We are exploring a business called “data analytics.”  One potential outcome of this effort is the licensing of data to third party providers. 

The data would be higher level demographic and completely anonymous transactional data.  It could be used for benchmarking, determining what is selling and where and many other types of analytics.

A prototype has been developed and there is a client working group.  We are in the beginning stages of application development and hope to be finished by the fourth quarter of 2010.

Annuity Digest:  Does DTCC advocate open standards for data exchange?

Adam Bryan:   Yes.  The insurance standards are ACORD and DTCC technology is developed for ACORD standards. 

We are big supporters of standards for message flow.  There are other places for value add and creation on top of the core standards.

Annuity Digest:  Where is DTCC headed and what is in the 2010 pipeline?  Where do you see the most potential for application of technology in the retirement income industry?

Adam Bryan:  There are several areas of focus for DTCC in 2010.

First, we need to ensure that we can effectively go after the independent broker dealer channel.

Second, we are focused on enabling Web accessibility (what we refer to as Access Services) for certain product lines.

Further, we have provided the first carrier-to-carrier messaging capability that provides the status of a Section 1035 exchange and allows folks to electronically manage a 1035 exchange.

Last, as discussed earlier, we are working on the data analytics product initiative.

Ultimately, our objectives are always driven by client budgets and client business priorities.  Our efforts increasingly the next paper-related pain-point and how electronic processing can be brought to bear.

Our efforts add enormous value for industry participants.  As an example, a current client who uses our licensing and appointment technology saw their manual cost for these processes decrease from $20 to 75 cents.

Annuity Digest:  How would industry participants who are interested in your services get in touch with the company?  Does DTCC have a direct sales-force?

Adam Bryan:  Yes, we have our own sales and relationship management functions and we are very active in industry forums.  We also encourage carriers to let folks know about us.

Annuity Digest:  Thank you Adam.

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