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UPDATE 2-ING to overhaul Dutch insurance business

Published 07/01/2009, 04:14 AM
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* Will unify operations as Nationale-Nederlanden

* Aims to boost annual income by 100 million euros from 2013

* To cut 800 jobs, mainly through attrition

(Adds analyst comment, shares)

AMSTERDAM, July 1 (Reuters) - Dutch financial services group ING will combine its local insurance brands, aiming for an annual income boost of 100 million euros ($141 million) from 2013 after a restructuring which will include 800 job cuts.

ING's insurance operations Nationale-Nederlanden, RVS and ING Verzekeren Retail will be combined under the banner of the largest, Nationale-Nederlanden, the bancassurer said on Wednesday. ING was formed in 1991 when Nationale-Nederlanden and NMB Postbank Groep merged.

ING will spend 165 million euros in the first four years for the overhaul of its Dutch insurance business, it said.

Chief Executive Jan Hommen said the plan was part of ING's "back to basics" strategy, and the changes would better serve 5 million insurance clients in the Netherlands.

SNS Securities called the move a "logical step".

"Even though ING might (lose) some of its customers by the integration, we believe it will win customers on the long run by creating a cost efficient and customer oriented Dutch insurance organisation," SNS analysts said in a research note.

Shares in ING rose 1 percent to 7.24 euros in opening trade. Since April 9, when its restructuring strategy was announced, ING shares are up 36.4 percent, compared with a gain of 16 percent for the DJ STOXX European insurance index.

ING said it expected the changes to deliver a "positive profit and loss impact" from 2010. The 800 jobs will go mainly through attrition over three years.

The Benelux insurance business represented about 29 percent of the 11.18 billion euros in underlying insurance income ING reported in the first quarter.

After posting a loss in 2008 and getting a 10 billion euros injection from the Dutch state, ING unveiled a plan in April to slim down and shed assets.

It has said relatively little about that restructuring since, though it did say in June it meant to leave 10 of the 48 countries where it currently does business. ($1=0.7077 euro) (Reporting by Ben Berkowitz and Reed Stevenson; Editing by Dan Lalor and Simon Jessop)

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