May 14, 2008 / 11:08 AM / in 9 years

ING Canada's profit drops 82 percent

TORONTO, May 14 (Reuters) - ING Canada Inc IIC.TO posted an 82 percent drop in first-quarter profit on Wednesday, hurt by slumping equity markets and severe winter storms in Central Canada that hit its home insurance business.

The company, Canada's biggest property and casualty insurer, said it had earned C$23 million, or 19 Canadian cents a share, down from C$126.2 million, or 95 Canadian cents a share, a year earlier.

Net operating income, which excludes market yield adjustment and net gains on invested assets and other gains after taxes, fell 38 percent to C$70.2 million, or 56 Canadian cents a share, from C$112.8 million, or 84 Canadian cents a share.

"The harsh winter conditions during the first three months of the year adversely impacted an otherwise solid operating performance," Chief Executive Charles Brindamour said in a release. "Numerous storms and near-record snow falls in Central Canada resulted in a loss on our home insurance activities.

"While the industry's loss ratios are usually higher during the first quarter, this year's weather conditions had a more severe impact than usual."

The company's combined ratio, a measure of how much money was spent on claims and expenses compared with how much was earned in premiums, increased to 99.9 percent in the first quarter from 96 percent a year earlier.

Direct written premiums -- premiums collected from policyholders before deducting reinsurance premiums -- rose 1.7 percent to C$860.3 million.

Return on equity for the past 12 months fell to 13 percent from 19.4 percent. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Lisa Von Ahn)

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