ING Groep N.V. wants to reduce the scope of its U.S. operations “over time and as market conditions permit.”
The U.S. insurance operations will continue to be a “key building block” in the ING insurance business, but, in the United States “a fundamental shift in the risk profile will be achieved by focusing on individual life and retirement services and a transition of the variable and fixed annuities business to low-risk rollover products,” according to ING, Amsterdam.
“For the non-core businesses, including employee benefits, group reinsurance and the existing annuity books, strategic options will be reviewed,” the company says. “The U.S. financial products division will be reduced as assets mature.”
“We are taking ING back to basics on all levels,” says Jan Hommen, who is on track to become ING’s next CEO. “We will be focusing on fewer but more transparent products.”
ING will be separating insurance and banking operations throughout the world, and says it will be focusing the insurance business on life and retirement services.
“The business will be managed regionally with an aggregated balance sheet,” ING says.
ING picked the candidates for pruning by looking for “smaller businesses with no clear outlook for market leadership” that it says consume “a disproportionate amount of capital.”
“To address this over-extension, ING has made portfolio choices based on market leadership, capital intensity, return on capital, funding needs, earnings contribution and the overall coherence of the group,” the company says.
ING announced a $1.3 billion companywide cost-control effort in January.
Since then, ING says it has eliminated more than 3,500 of the 7,000 full-time-equivalent jobs that it wants to cut.