ING Canada reports 40% slip in profits

ING Canada has reported a Cdn$64-million decrease in its 2007 Q3 profits.
This year, the company reported a 2007 Q3 net income of Cdn$92 million, down from Cdn$156.8 million over the same period last year.
For the first nine months of the year, INGs net income was Cdn$412.6 million, down from the Cdn$548.7 million the company reported for the same period in 2006.
Direct written premiums increased 3% in the quarter to Cdn$1.08 billion, while underwriting income decreased 70% to Cdn$28.7 million from last years Cdn$95.9 million.
Underwriting income decreased during the quarter as a result of a deterioration of our automobile insurance results and higher property losses, resulting mainly from an increase in storm activity in Western Canada, Claude Dussault, ING Canada president and CEO, said in a statement.
Lower favourable prior year claims development also impacted our underwriting results. While our investments activities generated higher interest and dividend income, disappointing capital market conditions resulted in a net loss on debt securities and reduced overall profitability, he added.
ING Canada notes inflation and increasing accident benefit and bodily injury claims in Ontario may lead to an increase in premiums.
In addition, increases in water-related damage caused by weather conditions and construction costs are contributing to higher loss ratios in personal property insurance, a statement says.