TEXT-S&P continues to monitor potential sale of ING Life
(The following statement was released by the rating agency)
Sept 11 - Standard & Poor's Ratings Services today said that it will continue to monitor the potential divestment of Japan-based ING Life Insurance Co. Ltd. (ING Life; BBB+/Developing/--) by its Dutch parent ING Groep N.V. (A+/Stable/A-1) after the Nikkei reported that the global financial services conglomerate is trying to sell ING Life to Hong Kong-based Pacific Century Group (not rated). ING Life has said no decisions have been made so far.
We have already incorporated into the current ratings and outlook on ING Life a high likelihood that it will be divested out of the ING group. The current ratings on ING Life also reflect its stand-alone credit profile (SACP). Standard & Poor's will pay close attention to the progress of the potential divestment and, if a sale is confirmed, we will review the SACP of ING Life and incorporate the financial strength of its future owner into our credit analysis and ratings on the insurer. In addition, we will incorporate our assessment of its strategic importance under the new parental structure into our credit analysis and ratings on the insurer. If a sale is confirmed, the following factors will be important in our review of ING Life's SACP:
-- Impact on ING Life's business franchise by a potential change in its brand name;
-- The new parent group's strategy with regard to underwriting, enterprise risk management (ERM), and asset-liability management (ALM), which are very important elements for the insurance business;
-- Likelihood of ING Life and the new parent group securing a management team with strong expertise and experience in the corporate-owned life insurance (COLI) business, which is a core business for ING Life; and
-- Treatment of minimum guarantee risk on single premium variable annuity (SPVA), which has been transferred from ING Life to the ING group through reinsurance.
In addition, if ING Life is sold to a group that does not focus on the insurance business, we will take into consideration other factors, such as the availability of support systems for insurance business know-how and human resources that entities within insurance groups can usually enjoy, and also the prospects of being established under a new brand name.
RELATED CRITERIA AND RESEARCH
Ratings On ING Life Japan Lowered To 'BBB+'; Outlook Developing, Jan. 19, 2012
Principles Of Credit Ratings, Feb. 16, 2011
Interactive Ratings Methodology, April 22, 2009
Group Methodology, April 22, 2009
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