ING Canada profit drops on weak markets, weather

Wed Aug 13, 2008 8:02am EDT
 
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TORONTO (Reuters) - Home and auto insurer ING Canada Inc said profit fell 42 percent in the second quarter as weak equity markets hurt investment gains and severe weather knocked underwriting income.

The company, Canada's biggest property and casualty insurer, said net income was C$112 million ($105 million), or 91 Canadian cents a share, in the three months ended June 30. That was down from C$194.3 million, or C$1.56 a share, in the same period a year earlier.

On a net operating basis, the insurer earned 89 Canadian cents a share, down from C$1.06 a year earlier.

Analysts had expected a profit of 92 Canadian cents a share, according to Reuters Estimates.

Severe spring storms and an extended winter hurt underwriting results, the company said. Underwriting income fell 18.4 percent to C$43.4 million.

The company's return on equity for the 12-month period ended June 30 slipped to 10.3 percent, from 18.3 percent a year earlier.

Its combined ratio, which measures how much was spent on claims and expenses as a percentage of premiums earned, rose to 95.6 percent, from 94.6 percent a year earlier.

ING Canada is 70 percent owned by Dutch financial services company ING Groep and operates under the ING Insurance, belair direct and Grey Power banners.

($1=$1.07 Canadian)

(Reporting by Ka Yan Ng; editing by Janet Guttsman)