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ING Insurance Units In Hong Kong

ING To Sell Insurance Units In Hong Kong

ING sells to Pacific Century Group

ING sells to Pacific Century Group

– Units sold in combined transaction to Pacific Century Group
– ING to receive total cash consideration of USD 2.14 billion (EUR 1.64 billion)
– Transaction expected to deliver net gain of approximately EUR 1 billion
– Process to sell remaining Asian Insurance/Investment Management units on-going

ING announced that it has reached an agreement to sell its life insurance, general insurance, pension and financial planning units in Hong Kong and Macau, and its life insurance operation in Thailand to Pacific Century Group (PCG) for a combined consideration of USD 2.14 billion (EUR 1.64 billion) in cash.

The agreement is part of the previously announced intended divestment of ING’s Asian insurance and investment management activities. In this context, ING announced last week it reached an agreement to sell its Malaysian insurance activities for approximately EUR 1.3 billion. The process for the remaining businesses is on-going. Further announcements will be made if and when appropriate.

“We are pleased to have found in Pacific Century Group a good home for our customers, employees and agents with the ambition to continue to expand the businesses in these countries,”  said Jan Hommen, CEO of ING Group. “This transaction underscores the steady progress we continue to make in our restructuring.”

The agreement values ING’s Hong Kong, Macau and Thai combined life insurance businesses at 24.3x estimated 2012 earnings and 1.9x estimated 2012 book value of EUR 865 million, both on an IFRS basis. Earnings until closing are to the benefit of PCG. At closing, ING expects the transaction to deliver a net gain of approximately EUR 1 billion.

ING is a top 10 life insurer in Hong Kong, Macau and Thailand. In Hong Kong and Macau, where ING offers general and life insurance products as well as pension and financial planning services, ING serves more than 270,000 customers through approximately 400 employees and 1,600 tied agents. In Thailand, where ING offers life insurance as well as pension products, ING serves more than 300,000 customers through about 480 employees and over 4,000 tied agents.

PCG is a private firm founded in 1993 by Richard Li. Over the years, PCG has built interests in financial services, real estate, satellite communications, media and telecommunication services in Asia. Richard Li is the Chairman of HKT, the largest telecom operator in Hong Kong, and the major shareholder of PineBridge Investments, a U.S.-based asset manager with USD 68 billion under management globally.

ING Investment Management’s funds management businesses in Hong Kong and Thailand are outside the scope of this transaction. The transaction announced today does not impact ING’s Asian banking activities.

The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2013.

Loss Estimate Regarding Japan

Catlin Group Limited, the international specialty property/casualty insurer and reinsurer, announces an initial estimate of the financial impact of the 11 March 2011 earthquake and tsunami which devastated areas of northeast Japan.

Japan Financial Impact Estimate

Japan Financial Impact Estimate

Catlin expresses its sympathy to the Japanese people following the tragedy. The Group has made a financial contribution to Save the Children to help the organisation provide aid to young people whose lives have been affected by the earthquake and tsunami.

Catlin currently estimates that its losses related to this Japanese earthquake and tsunami will amount to approximately US$200 million, net of reinsurance and reinstatements. This estimate is based on total insured losses of between US$20 billion and US$30 billion.

This estimate is subject to a considerable degree of uncertainty as the full scale of human and economic damage is not yet known. It will be many months until the total amount of insured damage arising from this catastrophe can be estimated with precision.

Catlin had previously estimated that its losses from other first-quarter catastrophes – the January flooding in Brisbane and other areas of Australia and the February earthquake in Christchurch, New Zealand – would amount to US$175 million, net of reinsurance and reinstatements. There has been no material change in the loss estimates arising from either of these events.

The Group believes that whilst the combined losses from the three first-quarter catastrophes will have a significant impact on 2011 earnings, the Group’s capital base remains intact.

Catlin has in place broadly a US$500m catastrophe aggregate deductible in respect of gross catastrophe claims. The Group has significant reinsurance protection in place above this deductible. A substantial portion of the losses from another major catastrophic event during 2011 would be recoverable from the reinsurance programme.