ING sees Q1 LatAm profits fall 16%

Dutch financial services group ING (NYSE: ING) reported a 16% drop in first quarter pre-tax profits from its Latin American insurance operations due to weakness in Mexico and several South American markets. Pre-tax profits of 53mn euros (US$67.3mn) compared with 63mn euros in the first quarter of 2004, ING said in an earnings release Thursday. Premium income from the region was down nearly 18% to 454mn euros due to lower premiums from Mexico. In Mexico, profits fell 13% to 40mn euros because of higher claims in auto, which was partially offset by improved performance in other non-life insurance lines. Premiums fell 28% to 307mn euros, largely due to the non-renewal of a few large contracts in the commercial non-life business. Mexico is ING's largest market in the region, where it owns one of the country's top three insurers, ING Comercial America. In South America, profit before tax from Chile, Brazil, Peru and Argentina declined nearly 24% to 13mn euros, because of weaker results in Chile due to lower investment yields. Results were also lower in Brazil due to higher claims in P&C insurance. Premiums increased 20.5% thanks to higher annuity sales in Chile.