ING Canada posts 2007 net income drop, cites “unfavourable capital markets”

ING Canada Inc. reported net income of Cdn$95.8 million for 2007 Q4.
This is down from $109.4 million in 2006 Q4, mainly due to lower results from invested assets, the company notes.
“Our investment activities continue to generate substantial interest and dividend income, but recent unfavourable capital markets conditions led to a net loss of Cdn$3.3 million on invested assets,” Charles Brindamour, president and CEO, commented in a release. “Despite a more challenging environment in 2007, our profitability for the year remains strong with a net income of Cdn$508.3 million and a 15.4% return on equity.”
The company’s 2007 net income is down from its 2006 net income of Cdn$658.1 million.
Net operating income increased to Cdn$102.8 million, while direct premiums written, excluding pools, increased slightly during the quarter to reach Cdn$961.3 million.
Direct premiums written reached $961.3 million during the quarter, a 0.6% increase over the same quarter of last year. For the year, direct premiums written were Cdn$4.1 billion up from $3.99 billion, a 2.9% increase driven by higher personal lines premiums both during the quarter and the year despite an overall annual rate decrease of 1.4%.
Underwriting income for the quarter amounted to Cdn$47.5 million, down 23.8% from the corresponding quarter of last year but increased year-over-year, excluding the impact of a Cdn$20.7 million increase to net claims liabilities to reflect lower interest rates.
Increases in underwriting income in personal property and commercial non-auto largely offset lower results in auto insurance, the company reported.
Overall the combined ratio increased by 1.7 percentage points during the quarter to reach 95.3%.
For the year 2007, underwriting income fell 48.3%, to Cdn$208.9 million. The company attributed its 94.7% combined ratio to more claims in personal auto and in property.