Slide 1: 2004 Fourth Quarter and Full Year Financial and Operating Results
ING Canada Inc. 2004 Fourth Quarter and Full Year Financial and Operating Results February 17, 2005 PRELIMINARY DRAFT www.ingcanada.com
Slide 2: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer Certain of the statements contained in this presentation about our current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward looking stateme
Slide 3: Presenters: Dussault, Cunningham, Brindamour
Claude Dussault (President & CEO) Michael Cunningham (Senior Vice-President & CFO) Charles Brindamour (Executive Vice-President) 3
Slide 4: 2004 Highlights
2004 Highlights Strong financial results Net income of $624 million (up 315% over 2003) (1) Earnings per share (diluted) of $6.49 (2) Earnings per adjusted share (diluted pro forma) of $4.67 Return on equity of 40.9% (vs 16.5% in 2003) Combined ratio of 86.0% (vs 98.1% in 2003) Debt to t
Slide 5: Direct Premiums Written
Direct Premiums Written R = 17.5% 3-year CAG ($ millions) +11% +4% $4,000 +42% $3,576 $3,444 $3,107 $3,000 $2,192 $2,000 $1,000 $852 $883 $0 2001 2002 Q4-2003 2003 Q4-2004 2004 Modest growth consistent with reduced auto insurance rates brought about by regulatory reforms 5
Slide 6: Net Premiums Earned
Net Premiums Earned R = 18.5% 3-year CAG ($ millions) $4,000 +22% $3,365 +18% $3,000 +16% $2,761 $2,337 $2,019 $2,000 $888 $1,000 $732 $0 2001 2002 Q4-2003 2003 Q4-2004 2004 NPE growth driven primarily by commutation of the 2001 quota-share treaty 6
Slide 7: Combined Ratio
Combined Ratio 120% 102.7% 101.2% 101.8% 98.1% 100% 29.0% 27.4% 28.5% 86.7% 86.0% 80% 30.0% 30.6% 29.4% 60% 40% 73.7% 73.8% 73.3% 68.1% 56.1% 56.6% 20% 0% 2001 2002 Q4-2003 2003 Q4-2004 2004 Claims ratio Expense ratio Significant reduction in claims frequency across all business lines was evident th
Slide 8: Investment Yields
Investment Yields(1) 10% 8% 6.5% 6.0% 5.9% 6% 5.7% 4% 2% 0% 2001 2002 2003 2004 A low interest rate environment continued to prevail in 2004 (1) : Pre-tax, at book value, excluding realized gains and losses 8
Slide 9: Operating Earnings
Operating Earnings ($ millions) $600 $535.1 $500 $400 $300 $532.3 $200 $171.2 $149.0 $65.8 $98.7 $100 $23.7 $144.0 $147.8 $65.8 $37.7 $0 $19.8 2001 2002 Q4-2003 2003 Q4-2004 2004 (1) ING Canada standalone After-tax Zurich Related Charges Significant growth in operating earnings driven by deep improv
Slide 10: Realized Investment and Other Gains
Realized Investment and Other Gains(1) ($ millions) $150 $132.4 $100 $50 $34.2 $32.1 $36.3 $16.3 $2.5 $0 2001 2002 Q4-2003 2003 Q4-2004 2004 Favourable equity markets fuelled strong realized gains (1) Pre-tax 10
Slide 11: Net Income
Net Income ($ millions) $627.0 $600 $500 $400 $300 $624.2 $177.7 $174.3 $200 $86.9 $90.3 $100 $173.1 $28.6 $150.5 $86.9 $0 $29.3 $24.7 2001 2002 Q4-2003 2003 Q4-2004 2004 (1) ING Canada Standalone After-tax Zurich Related Charges Results for the year were driven by improved underwriting results, hig
Slide 12: Return On Equity
Return On Equity 50% 41.1% 40% 30% 19.5% 20% 40.9% 7.9% 9.2% 10% 16.5% 7.9% 3.0% 0% 2001 2002 2003 2004 (1) (2) ING Canda ROE After-tax Zurich Related Charges An unusually high ROE not sustainable over an extended period (1) Based on Canadian GAAP (2) Amortized non-recurring costs related to the 200
Slide 13: Debt to Total Capital Ratio
Debt to Total Capital Ratio 50% 40% 37.5% 32.8% 30.5% 30% 20% (1) 11.1% 10% 0% 2001 2002 2003 2004 IPO proceeds and retained earnings served to increase equity and reduce debt (1) : $129 of debt repaid in January 2005 upon receipt of $129 in net over-allotment proceeds. 13
Slide 14: Questions & Answers
ING Canada Inc. Questions & Answers www.ingcanada.com
Slide 15: Questions and Answers
Questions and Answers Q1: What’s the status of the Allianz integration process? Any surprises? A1: No surprises to date. The Allianz portfolio has commenced renewal on our system, and the majority of Allianz’s employees have been integrated into ING business units. Q2: When will ING Canada be includ
Slide 16: Questions and Answers
Questions and Answers Q3: Can you comment on current market conditions? A3: There remains a downward bias in auto insurance pricing consistent with the benefits of recent regulatory reforms enacted in various provinces. Furthermore, the lower automobile claims frequencies observed in 2004 will eithe
Slide 17: Questions and Answers
Questions and Answers Q4: Why did Standard and Poor’s downgrade Allianz and Trafalgar ? A4: The January 26, 2005 downgrades, from BBB+ to BBB, took place following brief, preliminary discussions with ING. While this action frankly took us by surprise, it was apparently in keeping with S&P’s technica
Slide 18: Questions and Answers
Questions and Answers Q5: What is your assesment of the impact of recent regulatory reforms ? A5: The reforms implemented in 2003 and 2004 in Alberta, New Brunswick, Nova Scotia and Ontario appear to have reduced costs as well as stabilised claims inflation to the extent anticipated. This has led to
Slide 19: www.investor.ingcanada.com
ING Canada Inc. www.investor.ingcanada.com