ING Canada Reports Second Quarter Results



    Earnings per share up to $1.56

    Strong investment results offset decline in underwriting income

    TORONTO, Aug. 8 /CNW/ - ING Canada Inc. (TSX: IIC) reported net income of
$194.3 million for the quarter ended June 30, 2007, compared to $206.0 million
in the same quarter last year. On a per share basis, net income increased to
$1.56 from $1.54 as a result of a share buyback completed earlier this year.
The growth in direct premiums written remained strong during the quarter
despite overall rate reductions, and amounted to $1,205.1 million, a 3.7%
increase excluding industry pools.
    For the first six months of the year, net income amounted to
$320.5 million or $2.49 per share compared to $391.8 million or $2.93 per
share while direct premiums written reached $2,059.2 million, a 3.9% increase
excluding industry pools.

    CEO's comments

    Claude Dussault, President and CEO, commented:
    "The strong performance of our investment activities, which resulted in
higher interest and dividend income and increased gains on the sale of
invested assets, softened the impact of a reduced contribution of our
underwriting activities to our overall profitability. Underwriting income
declined during the quarter as a result of an increase in the severity of
property losses and higher damages resulting from seasonal storm activities in
some regions.
    "The effective deployment of our capital through a share buyback
completed earlier this year allowed us to continue creating value for our
shareholders with an increase in earnings per share during the quarter and a
return on equity of 18.3% over the last twelve months."

    Dividend

    ING Canada declared a quarterly dividend of 27.0 cents per share on its
outstanding common shares. The dividend will be payable on September 28 to
shareholders of record on September 14.

    Current Outlook

    Management expects several key factors to affect the property and
casualty insurance industry over the coming twelve months. Both top-line
growth and underwriting ratios for the property and casualty insurance
industry will trend back towards historical levels. The cost containment
measures in automobile insurance adopted over the years will continue to be a
key performance driver. While automobile claims frequency continues to remain
low, increases in frequency or severity of claims may lead to rate increases.
Commercial insurance markets remain competitive and prices continue to soften.
Furthermore, non-residential construction costs increases are also exerting
pressure on commercial insurance underwriting margins.

    
    Financial Highlights

    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
                          ----     ----    ------    ----     ----    ------
                           Q2       Q2                YTD      YTD
                           --       --                ---      ---
    Direct Premiums
     Written
     ($ millions)       1,205.1  1,176.1     2.5%  2,059.2  1,988.6     3.6%
    Net Premiums Earned
     ($ millions)         976.7    955.7     2.2%  1,933.3  1,892.6     2.2%
    Underwriting Income
     ($ millions)          92.3    165.6  (44.3)%    132.6    245.6  (46.0)%
    Net Income
     ($ millions)         194.3    206.0   (5.7)%    320.5    391.8  (18.2)%
    Earnings Per
     Share ($)
    Basic and Diluted      1.56     1.54     1.3%     2.49     2.93  (15.0)%
    Return on Equity
     - last 12 months     18.3%    27.5% (9.2)pts
    Combined Ratio        90.6%    82.7%  7.9 pts    93.1%    87.0%  6.1 pts
    -------------------------------------------------------------------------


    Financial Summary

    -   Net income for the second quarter of 2007 was $194.3 million, a 5.7%
        decrease from the same quarter in 2006. The decrease was primarily
        driven by higher property claims due to increased severity and
        weather-related damage in both personal and commercial property.
        Higher gains on invested assets and dividend income, greater
        contribution from the corporate and distribution segment as well as
        lower taxes partially offset the lower underwriting income.

        For the first six months of the year, net income amounted to
        $320.5 million down 18.2% from the corresponding period of last year.
        The decline in both underwriting income and in net gains on invested
        assets was partly offset by higher interest and dividend income,
        corporate and distribution income as well as lower taxes.

    -   Direct premiums written amounted to $1,205.1 million during the
        quarter, compared to $1,176.1 million in the same quarter of last
        year, a 3.7% increase excluding industry pools. The growth in direct
        premiums written remained strong driven by personal insurance which
        grew by 6.5%, excluding pools. Overall, the number of written risks
        also increased by 3.2%. While the increased number of risks insured
        had a positive impact on the direct premiums written, the growth rate
        was constrained by a 1.9% average rate reduction fuelled mainly by
        lower automobile insurance rates.

        For the first six months of the year, direct premiums written
        increased by 3.9% excluding pools. The growth occurred exclusively in
        personal insurance.

    -   Net premiums earned during the quarter amounted to $976.7 million, up
        2.2% compared to the same period last year. For the first six months
        of the year, net premiums earned also increased at the same rate.

    -   Underwriting income for the quarter amounted to $92.3 million down
        44.3% from the corresponding quarter of last year. The decline
        reflects mainly higher severity in property and the increased cost of
        weather-related claims that occurred during the quarter. Underwriting
        income benefited from a reduction in claims liabilities due to higher
        market interest rates used to describe them. Overall the combined
        ratio increased by 7.9 points to reach 90.6%. For the first six
        months of the year underwriting income fell 46.0% to $132.6 million
        with a 93.1% combined ratio.

        In personal insurance, property insurance underwriting registered a
        loss of $23.9 million during the quarter while automobile insurance
        underwriting income fell 5.7% to $73.8 million. Automobile insurance
        results remain healthy but continue to be negatively impacted by past
        rate reductions. Overall personal insurance underwriting income is
        down 38.5% to $87.0 million for the first six months of the year.

        Commercial insurance underwriting income fell by 34.1% during the
        period to $42.3 million as a result of increased severity. For the
        first six months, commercial insurance underwriting income amounted
        to $45.6 million down from $104.2 million last year.

    -   Interest and dividend income, net of expenses increased 6.6% to reach
        $86.9 million during the quarter and were up 12.3% for the first six
        months of the year. These increases were driven by higher dividend
        income as a result of increased equity holdings and higher dividend
        yields.

    -   Net gains on invested assets amounted to $53.6 million, a 54.0%
        increase driven mainly by more favourable equity market conditions.
        For the first six months of the year, net gains on invested assets
        declined from the unusually high level of 2006, when the portfolio of
        debt securities was realigned.

    -   Corporate and distribution income also increased both in the quarter
        and the first six months of the year.

    -   Net operating income, which is defined as net income excluding net
        gains on invested assets and other gains after tax, declined to
        $158.7 million or $1.27 per share from $182.6 million or $1.37 per
        share. Net operating income also declined during the first six months
        of the year.

    -   Shareholders' equity decreased 7.0% mainly as a result of the
        completion of the $500 million Substantial Issuer Bid on March 30.
    

    Analyst estimates

    Earnings per share for the quarter amounted to $1.56 compared to an
average estimate of $1.30 among the analysts that follow the company.

    Conference Call

    ING Canada will host a conference call to review its earnings results
later this morning at 10:00 am ET. To listen to the call via live audio
webcast and to view the presentation slides and supplementary financial
information, visit our website at www.ingcanada.com and click on "Investor
Relations".
    The conference call is also available by dialling 416-644-3418 or
1-800-731-5319 (toll-free in North America). Please call ten minutes before
the start of the call.
    A replay of the call will be available starting at 12:30 p.m. ET today
through 11:59 p.m. ET on August 16. To listen to the replay, call 416-640-1917
or 1-877-289-8525 (toll-free in North America). The passcode is 21240895. A
transcript of the call will also be available on ING Canada's website.

    About ING Canada

    ING Canada is the largest provider of property and casualty insurance in
the country, offering automobile, property and liability insurance to
individuals and businesses through its insurance subsidiaries.



    ING Canada Inc.
    Management's Discussion and Analysis

    TABLE OF CONTENTS

    Section
    -------------------------------------------------------------------------

    Section 1 - Description of the business
    Section 2 - Industry outlook
    Section 3 - Overview of consolidated performance
    Section 4 - Consolidated performance review
    Section 5 - Segment performance review
    Section 6 - Summary of quarterly results
    Section 7 - Financial condition
    Section 8 - Accounting and disclosure matters
    Section 9 - Risk management principles and responsibilities
    Section 10 - Other matters
    -------------------------------------------------------------------------

    The following Management's Discussion and Analysis (MD&A), which was
approved by the Board of Directors on August 7, 2007, for the quarter ended on
June 30, 2007 should be read in conjunction with our Unaudited Interim
Consolidated Financial Statements and accompanying notes as well as the MD&A
and the Consolidated Financial Statements in the Company's 2006 Annual Report
to Shareholders.
    The Company uses both generally accepted accounting principles (GAAP) and
certain non-GAAP measures to assess performance. Non-GAAP measures do not have
any standardized meaning prescribed by GAAP and are unlikely to be comparable
to any similar measures presented by other companies. ING Canada analyzes
performance based on underwriting ratios such as combined, general expenses
and claims ratios as well as other performance measures. Such measures are
defined in a glossary of terms on the Company's web site at www.ingcanada.com.
Click on "Investor Relations", "Financial Information" and "Glossary" on the
left navigation bar.

    Forward-looking statements

    This document contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from these
forward-looking statements as a result of various factors, including those
discussed below or in our 2006 Annual Information Form. Please read the
cautionary note in section 10.2 of this document. Certain totals, subtotals
and percentages may not agree due to rounding. Additional information about
ING Canada, including the Annual Information Form, may be found online on
SEDAR at www.sedar.com.
    All figures in the MD&A tables are in millions of Canadian dollars,
except as otherwise noted. A change column has been provided for convenience
showing the change between the two quarters. Not applicable ("n/a") is used
when there is no comparable information or the change percent exceeds 1,000.
Not material ("n/m") is used when figures are not significant.

    SECTION 1 - DESCRIPTION OF THE BUSINESS

    ING Canada is the largest provider of property and casualty insurance in
Canada with approximately an 11 percent market share. The Company offers
automobile, property and liability insurance to individuals and small- to
medium-sized businesses through broker and direct-to-consumer channels under
the ING Insurance, belairdirect and Grey Power brands. The personal automobile
business makes up approximately 50 percent of direct premiums written,
personal property comprises 20 percent and commercial insurance makes up 30
percent. The independent broker channel accounts for approximately 80 percent
of direct premiums written. The Company's investment management subsidiary
manages the invested assets of the insurance subsidiaries.
    ING Canada's strategy is to continue to maximize growth in the broker and
direct-to-consumer channels. The Company is also expanding its network of
affiliated brokerages through small-scale acquisitions. ING Canada's goals are
to exceed the Canadian property and casualty insurance industry organic growth
rate by a minimum of 300 basis points over time and to exceed the industry
return on equity by at least 500 basis points annually.
    More detailed information on ING Canada's strategies for growth can be
found in the Company's 2006 Annual Report.

    SECTION 2 - INDUSTRY OUTLOOK

    Several key factors will affect the Canadian property and casualty
insurance industry over the coming 12 months.

    Industry growth and underwriting income

    We expect underwriting ratios and industry premium growth to trend toward
historical averages.

    Claims costs in automobile insurance

    Sustainability of cost containment measures will continue to be a key
performance driver. Historically, after a period of years, there is potential
for the effectiveness of such cost containment measures to atrophy and we will
be particularly watchful for any such indications in the quarters ahead.
Automobile claims frequency remains low. Increases in frequency and/or
severity may lead to premium increases.

    Commercial insurance competition

    Commercial insurance continues to be competitive. Prices have softened in
commercial lines, but the segment continues to deliver returns above
historical levels. We remain disciplined in pricing and underwriting and
committed to superior service to our brokers and commercial customers.

    Non-residential construction cost

    Non-residential construction cost increases are putting pressure on
commercial insurance underwriting margins. We continue working with our
brokers to ensure that our commercial customers retain sufficient coverage.
    ING Canada, with its scale advantage, underwriting discipline and pricing
sophistication, is well positioned to capitalize on the above conditions and
continue to outperform the industry's return on equity for the foreseeable
future. Our distinct product and service proposition delivered through a
multi-channel distribution network will be a key driver in fuelling organic
growth.

    SECTION 3 - OVERVIEW OF CONSOLIDATED PERFORMANCE

    
    Highlights

    -------------------------------------------------------------------------
    -   Continued strong growth in direct premiums written driven by
        increases in written insured risks and average amount insured
    -   Lower underwriting income primarily due to an increase in property
        severity, including weather-related events
    -   Higher gains on invested assets due to more favourable equity market
        conditions
    -------------------------------------------------------------------------

    Financial summary

    Table 1
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Written insured
     risks (thousands)  1,399.7  1,356.2     3.2%  2,350.1  2,271.1     3.5%
    -------------------------------------------------------------------------
    Direct premiums
     written (including
     pools)             1,205.1  1,176.1     2.5%  2,059.2  1,988.6     3.6%
    -------------------------------------------------------------------------
    Direct premiums
     written (excluding
     pools)             1,209.8  1,166.4     3.7%  2,056.1  1,978.9     3.9%
    -------------------------------------------------------------------------
    Underwriting:
    -------------------------------------------------------------------------
      Net premiums
       earned             976.7    955.7     2.2%  1,933.3  1,892.6     2.2%
    -------------------------------------------------------------------------
      Net claims and
       general expenses
       (table 3)          884.4    790.1    11.9%  1,800.7  1,647.0     9.3%
    -------------------------------------------------------------------------
      Net underwriting
       income              92.3    165.6  (44.3)%    132.6    245.6  (46.0)%
    -------------------------------------------------------------------------
        Combined ratio    90.6%    82.7%  7.9 pts    93.1%    87.0%  6.1 pts
    -------------------------------------------------------------------------
    Interest and
     dividend income,
     net of expenses
     (table 4)             86.9     81.5     6.6%    173.6    154.6    12.3%
    -------------------------------------------------------------------------
    Net gains on
     invested assets
     and other gains
     (table 5)             53.6     34.8    54.0%     79.7    142.5  (44.1)%
    -------------------------------------------------------------------------
    Corporate and
     distribution
     (table 9)             18.0     13.8    30.1%     36.3     21.4    69.2%
    -------------------------------------------------------------------------
    Income before
     income taxes         250.8    295.7  (15.2)%    422.2    564.1  (25.2)%
    -------------------------------------------------------------------------
    Income taxes           56.5     89.7  (37.0)%    101.7    172.3  (41.0)%
    -------------------------------------------------------------------------
        Effective
         income tax
         rate             22.5%    30.4% (7.9)pts    24.1%    30.5% (6.4)pts
    -------------------------------------------------------------------------
    Net income            194.3    206.0   (5.7)%    320.5    391.8  (18.2)%
    -------------------------------------------------------------------------
    EPS - basic and
     diluted (dollars)     1.56     1.54     1.3%     2.49     2.93  (15.0)%
    -------------------------------------------------------------------------
    ROE for the last
     twelve months        18.3%    27.5% (9.2)pts
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Second quarter 2007

    Excluding pools, direct premiums written increased by 3.7 percent in the
second quarter despite an average rate decline of 1.9 percent. Direct premium
growth was driven by a 3.2 percent increase in the number of written insured
risks and a 3.6 percent rise in the average amount insured. Personal insurance
continued to deliver strong growth in the second quarter.
    Net income for the second period was down by $11.7 million due to a
decrease in underwriting income, partly offset by higher net gains on invested
assets, an increase in dividend income and higher corporate and distribution
income. The effective income tax rate was 7.9 percentage points lower
year-over-year due to an increase in non-taxable income relative to
underwriting income and a reduction of tax liabilities.
    Lower underwriting income was primarily caused by an increase in severity
in personal property and commercial non-auto, as well as claims associated
with catastrophic floods and hail in Alberta. In personal auto, rate decreases
and an increase in severity contributed to lower underwriting results in the
quarter. Underwriting income benefited from a $40.8 million reduction to
claims liabilities to reflect higher market yields, which primarily affected
prior year claims development. The market yield adjustment is described in
section 7.
    The following table reflects major changes in income before income taxes.

    
    Table 2
    -------------------------------------------------------------------------
                                                  Three months    Six months
                                                         ended         ended
                                                       June 30,      June 30,
                                                          2007          2007
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    As reported in Q2 06                                 295.7         564.1
    -------------------------------------------------------------------------
      Lower favourable prior year claims development      (1.9)        (26.7)
    -------------------------------------------------------------------------
      Current accident year:
    -------------------------------------------------------------------------
        Higher losses  from catastrophes                 (15.3)         (9.6)
    -------------------------------------------------------------------------
        Lower results from Facility Association          (11.0)         (4.4)
    -------------------------------------------------------------------------
        Lower underwriting income                        (45.2)        (72.3)
    -------------------------------------------------------------------------
    Change in net underwriting income                    (73.4)       (113.0)
    -------------------------------------------------------------------------
    Higher (lower) net gains on invested assets
     and other gains                                      18.8         (62.8)
    -------------------------------------------------------------------------
    Higher interest and dividend income,
     net of expenses                                       5.5          19.1
    -------------------------------------------------------------------------
    Corporate and distribution                             4.2          14.8
    -------------------------------------------------------------------------
    As reported in Q2 07                                 250.8         422.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Year-to-date 2007

    Direct premiums written increased by 3.9 percent, excluding pools,
despite an overall rate decline of 2.1 percent. Growth was driven by a
3.5 percent increase in the number of written insured risks and a rise in the
average amount insured. Personal lines continued to demonstrate strong growth,
driven by successful initiatives to maximize growth in the broker network and
expand direct-to-consumer channels.
    Net income was down by 18.2 percent in the first six months of the year
due to a combination of lower underwriting income, as well as lower net gains
on invested assets in the first quarter compared to unusually high gains in
the first quarter of 2006. A lower effective tax rate, higher dividends and an
increase in income from the corporate and distribution segment positively
impacted results in the period.
    Year-to-date, the effective income tax rate was 24.1 percent versus
30.5 percent in the first six months of 2006. The rate decline is described in
more detail in the second quarter discussion above.
    Underwriting income was positively impacted by a reduction to claims
liabilities to reflect higher market yields (see section 7). Higher current
accident year claims were driven by a marked increase in severity in personal
property and commercial non-auto. Frequency rose modestly in personal lines
and decreased in the commercial business in the first half of the year.
    In the first quarter, one less day of earned premiums was included in the
quarter results, which negatively impacted underwriting income by
$10.8 million. In the second quarter, there was no impact on underwriting
income.

    Return on equity

    Return on Equity (ROE) for the twelve-month period ending June 30, 2007
was 18.3 percent compared to 27.5 percent for the same period last year. The
decline was due to lower year-over-year net income in the first half of 2007.
    ROE is a non-GAAP measure calculated by dividing net income for the
period by the average shareholders' equity during the same period. The average
shareholders' equity is the mean of shareholders' equity at the beginning and
end of the period. Shareholders' equity includes accumulated other
comprehensive income ("AOCI").

    Recent events

    In response to increasing consolidation in the mutual fund distribution
industry, evolving market trends and the need to offer a broader array of
financial products and services, ING Canada initiated a strategic review of
its wealth management business last year. Ultimately, the Company concluded
that its brokers, financial services representatives and their clients would
benefit from the more specialized support of a dedicated and well-established
financial products distribution company. On August 2, 2007, ING Canada
announced that it reached definitive agreements to transfer its mutual fund
assets administered by ING Wealth Management (IWM) to Groupe Cloutier Inc.
(Groupe Cloutier) in Quebec and Worldsource Financial Management Inc.
(Worldsource) in the rest of the Canada. Groupe Cloutier and Worldsource will
provide ING Canada's brokers and representatives with access to products and
services offered through IWM and will sponsor existing independent financial
services representatives of IWM.
    Historically, IWM did not contribute materially to the Company's annual
results. The transfer of assets from IWM to Groupe Cloutier and Worldsource is
subject to regulatory approvals and is expected to complete in Fall 2007.
Costs associated with the transfer of assets will not have a material impact
in 2007.
    Groupe Cloutier is a well established financial services brokerage that
has been operating in Quebec for over 25 years. The company has over 1000
financial services representatives and 100 employees.
    A subsidiary of Guardian Capital Group Limited, Worldsource Financial
Management Inc. is a mutual fund dealer offering a wide range of investment
products and services through more than 500 independent mutual fund
representatives.

    SECTION 4 - CONSOLIDATED PERFORMANCE REVIEW

    Written insured risks

    The number of written insured risks grew 3.2 percent during the quarter
and by 3.5 percent year-to-date, driven by solid growth in personal lines. In
commercial lines, the number of insured risks was flat in both quarters this
year.

    Direct premiums written

    Excluding pools, direct premiums written increased 3.7 percent in the
second period and 3.9 percent year-to-date, compared to the previous year,
driven by strong growth in written insured risks and the average amount
insured.

    Net claims and general expenses

    
    Table 3
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net claims:
    -------------------------------------------------------------------------
      (Favourable)
       prior year claims
       development        (37.6)   (39.5)  (4.7)%    (49.8)   (76.5) (34.9)%
    -------------------------------------------------------------------------
      Current year
       catastrophes        14.9     (0.4)     n/a     14.9      5.3   181.1%
    -------------------------------------------------------------------------
      Current year
       claims             624.0    537.8    16.0%  1,261.8  1,126.5    12.0%
    -------------------------------------------------------------------------
        Total             601.3    497.9    20.8%  1,226.9  1,055.3    16.3%
    -------------------------------------------------------------------------
    Commissions, net      147.6    154.9   (4.7)%    301.2    317.9   (5.3)%
    -------------------------------------------------------------------------
    Premium taxes, net     34.0     33.2     2.3%     67.6     65.3     3.6%
    -------------------------------------------------------------------------
    General expenses,
     net                  101.5    104.1   (2.5)%    205.0    208.5   (1.7)%
    -------------------------------------------------------------------------
    Total                 884.4    790.1    11.9%  1,800.7  1,647.0     9.3%
    -------------------------------------------------------------------------
    Combined ratio        90.6%    82.7%  7.9 pts    93.1%    87.0%  6.1 pts
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Prior year claims development

    Favourable prior year claims development declined slightly in the second
quarter and by $26.7 million year-to-date compared to the same periods in
2006. The decrease in favourable prior year claims development year-to-date
was mainly due to less favourable development in personal auto due to higher
accident benefit and bodily injury claims. Prior year claims development
benefited from an adjustment to claims liabilities to reflect higher market
yields discussed in section 7.

    Catastrophes

    In the second quarter, underwriting income was negatively affected by
$14.9 million in catastrophe-related claims compared to a $0.4 million
positive impact in the same period in 2006. Floods in Calgary and hail storms
in Edmonton caused the catastrophe-related claims in the second quarter.

    Current accident year claims

    Current accident year claims were up in the second quarter and
year-to-date mainly due to a rise in severity of property claims and personal
auto claims. Personal auto claims severity was up in the second quarter.
Overall, frequency decreased in both personal and commercial lines in the
second period. Year-to-date, frequency was up modestly in personal lines and
down in commercial lines.

    Commissions

    Variable commissions were down in the second quarter and year-to-date due
to lower underwriting results.

    Industry pools

    Industry pools consist of the so-called "residual market" as well as
risk-sharing pools ("RSP") in Alberta, Ontario, Quebec and New Brunswick.
These pools are managed by the Facility Association except the Quebec RSP. In
the second quarter and year-to-date, the net effect of transfers in and out of
these pools on current accident year results was negligible despite a negative
impact from the Facility Association.

    Interest and dividend income, net of expenses

    
    Table 4
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Interest income        47.3     49.8   (5.0)%     97.9     95.8     2.2%
    -------------------------------------------------------------------------
    Dividend income        44.6     37.5    18.9%     85.5     70.5    21.3%
    -------------------------------------------------------------------------
    Interest and dividend
     income, before
     expenses              91.9     87.3     5.3%    183.4    166.3    10.3%
    -------------------------------------------------------------------------
    Expenses               (5.0)    (5.8) (13.8)%     (9.8)   (11.7) (16.2)%
    -------------------------------------------------------------------------
    Interest and dividend
     income, net of
     expenses              86.9     81.5     6.6%    173.6    154.6    12.3%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Interest income

    Interest income is derived from debt securities, most of which are
corporate and government issued securities. The $2.5 million decline in
interest income in the second quarter was due to the sale of short-term
invested assets used to fund a $500.0 million share buyback in the first
quarter.

    Dividend income

    The increase in dividend income in the second quarter and year-to-date
was due to an increase in equity holdings and higher dividend yields versus
the same periods in 2006.

    Market-based yield

    The market-based yield is a non-GAAP measure that represents the total
interest and dividend income (before expenses) divided by the average fair
values of equity and debt securities held during the reporting period. The
market-based yield was 5.2 percent in the second quarter compared to
4.9 percent in the same quarter of last year. Year-to-date, the market-based
yield was 5.1 percent versus 4.7 percent in the first six months of 2006.

    Net gains on invested assets and other gains

    
    Table 5
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Debt securities:
    -------------------------------------------------------------------------
      Realized (losses)
       gains              (14.8)   (14.2)    4.2%     (9.4)    13.0 (172.3)%
    -------------------------------------------------------------------------
      Unrealized losses   (32.6)       -      n/a    (35.1)       -      n/a
    -------------------------------------------------------------------------
      Impairments          (1.3)       -      n/a     (1.3)       -      n/a
    -------------------------------------------------------------------------
      Gains on
       derivatives         15.1      3.7   308.1%     14.8      7.9    87.3%
    -------------------------------------------------------------------------
    Equity securities:
    -------------------------------------------------------------------------
      Realized gains       96.3     38.4   150.8%    129.9    116.8    11.2%
    -------------------------------------------------------------------------
      Unrealized
       (losses) gains      (2.2)       -      n/a      1.1        -      n/a
    -------------------------------------------------------------------------
      Impairments             -     (6.7)     n/a    (12.6)    (9.6)   31.3%
    -------------------------------------------------------------------------
    (Losses) gains on
     derivatives           (6.9)    12.4 (155.6)%     (8.3)    11.6 (171.6)%
    -------------------------------------------------------------------------
    Other                     -      1.2      n/a      0.6      2.8  (78.6)%
    -------------------------------------------------------------------------
    Total before
     income taxes          53.6     34.8    54.0%     79.7    142.5  (44.1)%
    -------------------------------------------------------------------------
        After income
         taxes             35.6     23.4    52.1%     48.1     95.4  (49.6)%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Net gains on invested assets

    In the second quarter, pre-tax gains on invested assets and other gains
increased by $18.8 million reflecting an increase in gains on equity
securities driven by more favourable equity market conditions and a decrease
in impairments. Bond market values fell sharply in the second quarter
following interest rate increases, resulting in realized and unrealized losses
on debt securities including losses on held-for-trading instruments. On a
year-to-date basis, significantly lower realized gains on invested assets in
the first quarter offset higher gains in the second period.
    From quarter to quarter, realized gains fluctuate due to the timing of
asset dispositions and market conditions. The Company's objective is to
maximize after-tax total returns and generate long-term value over time,
balancing preservation of capital, risk diversification and tax mitigation
strategies.

    Net operating income

    
    Table 6
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net income            194.3    206.0   (5.6)%    320.6    391.8  (18.2)%
    -------------------------------------------------------------------------
    Net gains on
     invested assets
     and other gains,
     after income taxes
     (table 5)             35.6     23.4    52.1%     48.1     95.4  (49.6)%
    -------------------------------------------------------------------------
    Net operating income  158.7    182.6  (13.1)%    272.5    296.4   (8.1)%
    -------------------------------------------------------------------------
    Average outstanding
     common shares
     (millions)           124.5    133.7   (6.9)%    129.0    133.7   (3.5)%
    -------------------------------------------------------------------------
    Net operating income
     per share (dollars)   1.27     1.37   (7.3)%     2.12     2.22   (4.5)%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Net operating income and net operating income per share are non-GAAP
measures. Net operating income is equal to net income less net gains on
invested assets and other gains, after tax. Net operating income per share is
equal to net operating income for the period divided by the average
outstanding number of common shares for the same period. These measures may
not be comparable to similar measures used by other companies, however, they
are widely used in the investment community to assess the Company's
performance.

    Other comprehensive income

    Other comprehensive income (OCI) was introduced with the new accounting
standards in 2007. OCI includes the changes in fair values of invested assets
classified as available for sale, less the gains realized on their sale which
are reclassified to income. Both items are tax affected. OCI was negative
year-to-date by $98.5 million. Negative other comprehensive income reflects
the decline in the net unrealized gain position during 2007 caused by higher
market interest rates and by equity dispositions.

    SECTION 5 - SEGMENT PERFORMANCE REVIEW

    The Company's segments are P&C insurance (underwriting) and corporate and
distribution. ING Canada's core business activity is underwriting which is
further divided into personal and commercial business lines. The corporate and
distribution segment includes the results of the Company's distribution
operations and other corporate items. The Company holds invested assets in its
holding company as well as in its P&C subsidiaries. These assets generate
interest and dividend income as well as realized and unrealized gains, both of
which have been discussed in detail above.

    Underwriting - Personal insurance

    
    Table 7
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Written insured
     risks (thousands):
    -------------------------------------------------------------------------
      Automobile          771.2    741.8     4.0%  1,291.8  1,238.3     4.3%
    -------------------------------------------------------------------------
      Property            482.7    468.3     3.1%    804.8    779.5     3.2%
    -------------------------------------------------------------------------
        Total           1,253.9  1,210.1     3.6%  2,096.6  2,017.8     3.9%
    -------------------------------------------------------------------------
    Direct premiums
     written (excluding
     pools):
    -------------------------------------------------------------------------
      Automobile          617.1    583.7     5.7%  1,039.0    979.3     6.1%
    -------------------------------------------------------------------------
      Property            262.2    241.7     8.5%    430.4    396.4     8.6%
    -------------------------------------------------------------------------
        Total             879.3    825.4     6.5%  1,469.4  1,375.7     6.8%
    -------------------------------------------------------------------------
    Net premiums earned:
    -------------------------------------------------------------------------
      Automobile          500.6    476.0     5.2%    986.8    940.4     4.9%
    -------------------------------------------------------------------------
      Property            205.7    194.9     5.5%    405.9    384.8     5.5%
    -------------------------------------------------------------------------
        Total             706.3    670.9     5.3%  1,392.7  1,325.2     5.1%
    -------------------------------------------------------------------------
    Net underwriting
     income:
    -------------------------------------------------------------------------
      Automobile           73.8     78.3   (5.7)%     87.7    108.6  (19.2)%
    -------------------------------------------------------------------------
      Property            (23.9)    23.2 (203.0)%     (0.7)    32.8 (102.1)%
    -------------------------------------------------------------------------
        Total              49.9    101.5  (50.8)%     87.0    141.4  (38.5)%
    -------------------------------------------------------------------------
    Ratios
    -------------------------------------------------------------------------
      Claims ratio        65.3%    55.8%  9.5 pts    65.7%    59.6%  6.1 pts
    -------------------------------------------------------------------------
      Commissions ratio   15.0%    16.4% (1.4)pts    15.5%    16.8% (1.3)pts
    -------------------------------------------------------------------------
      Premium taxes ratio  3.4%     3.4%  0.0 pts     3.5%     3.4%  0.1 pts
    -------------------------------------------------------------------------
      General expenses
       ratio               9.2%     9.3% (0.1)pts     9.1%     9.5% (0.4)pts
    -------------------------------------------------------------------------
    Combined ratio        92.9%    84.9%  8.0 pts    93.8%    89.3%  4.4 pts
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Second quarter 2007

    Direct written premiums grew by 6.5 percent excluding pools, driven by a
3.6 percent increase in written insured risks and a rise in the amount insured
in both personal auto and personal property. On average, rates decreased by
2.9 percent in personal auto and increased by 1.0 percent in personal
property.
    Underwriting income was negatively affected by an increase in current
year claims severity in personal property, rate decreases and higher severity
in personal auto, and lower favourable prior year claims development.
Catastrophic claims associated with floods and hail in Alberta also negatively
affected results in the second period. Overall, claims frequency was stable
during the quarter.

    Year-to-date 2007

    Excluding pools, direct premiums written rose 6.8 percent in the first
half of the year, driven by a 3.9 percent increase in the number of written
insured risks and an increase in average amount insured. Average rates in
personal auto decreased by 3.1 percent and increased by 0.7 percent in
personal property year-to-date.
    Underwriting income was lower due to an increase in current accident year
claims severity, rate decreases in personal auto and lower favourable prior
year claims development. Catastrophe-related claims in Alberta in the second
quarter also negatively impacted underwriting results for the first half of
the year. Frequency in personal auto was up slightly and flat in personal
property.

    Underwriting - Commercial insurance

    
    Table 8
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Written insured
     risks (thousands):
    -------------------------------------------------------------------------
      Automobile           79.2     79.3   (0.1)%    134.2    133.9     0.2%
    -------------------------------------------------------------------------
      Non-auto             66.5     66.7   (0.3)%    119.3    119.5   (0.2)%
    -------------------------------------------------------------------------
        Total             145.7    146.0   (0.2)%    253.5    253.4     0.0%
    -------------------------------------------------------------------------
    Direct premiums
     written (excluding
     pools):
    -------------------------------------------------------------------------
      Automobile           98.3    102.4   (4.0)%    166.9    170.7   (2.2)%
    -------------------------------------------------------------------------
      Non-auto            232.2    238.6   (2.7)%    419.8    432.5   (2.9)%
    -------------------------------------------------------------------------
        Total             330.5    341.0   (3.1)%    586.7    603.2   (2.7)%
    -------------------------------------------------------------------------
    Net premiums earned:
    -------------------------------------------------------------------------
      Automobile           79.9     82.0   (2.6)%    159.1    162.7   (2.2)%
    -------------------------------------------------------------------------
      Non-auto            190.5    202.8   (6.1)%    381.5    404.7   (5.7)%
    -------------------------------------------------------------------------
        Total             270.4    284.8   (5.1)%    540.6    567.4   (4.7)%
    -------------------------------------------------------------------------
    Net underwriting
     income (loss):
    -------------------------------------------------------------------------
      Automobile           10.4     15.4  (32.5)%     14.5     21.7  (33.2)%
    -------------------------------------------------------------------------
      Non-auto             31.9     48.8  (34.6)%     31.1     82.5  (62.3)%
    -------------------------------------------------------------------------
        Total              42.3     64.2  (34.1)%     45.6    104.2  (56.2)%
    -------------------------------------------------------------------------
    Ratios
    -------------------------------------------------------------------------
      Claims ratio        51.9%    43.4%  8.5 pts    57.7%    46.9% 10.8 pts
    -------------------------------------------------------------------------
      Commissions ratio   19.4%    20.2% (0.8)pts    20.1%    21.1% (1.0)pts
    -------------------------------------------------------------------------
      Premium taxes ratio  3.6%     3.6%  0.0 pts     3.6%     3.5%  0.1 pts
    -------------------------------------------------------------------------
      General expenses
       ratio               9.5%    10.3% (0.8)pts    10.1%    10.1%  0.0 pts
    -------------------------------------------------------------------------
    Combined ratio        84.3%    77.5%  6.9 pts    91.6%    81.6%  9.9 pts
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Second quarter 2007

    Excluding pools, direct premiums written decreased by 3.1 percent in
commercial lines reflecting a shift in the portfolio mix toward smaller
commercial accounts. Written insured risks were relatively flat.
    The decrease in underwriting income was caused by an increase in severity
in commercial non-auto. In commercial auto, lower underwriting income reflects
adverse prior year claims development offset by lower current year claims.
Overall, favourable prior year claims development increased in commercial
lines. Frequency in commercial lines was down in the second quarter.
    Softer growth in commercial lines reflects the competitiveness of the
commercial segment. ING Canada's commercial book is focused on small- to
medium-sized accounts, which are less price-sensitive than larger commercial
accounts, providing some insulation in a more aggressive pricing environment.

    Year-to-date

    Direct premiums written excluding pools were down 2.7 percent in the
first half of the year primarily due to a change in portfolio mix, referred to
in the second quarter discussion. The number of written insured risks was down
slightly.
    Underwriting income was down significantly for the first six months of
the year due to an increase in severity of current year claims in commercial
non-auto. Current accident year claims improved in commercial auto
year-over-year due to lower frequency and severity.

    Corporate and distribution

    Our corporate and distribution segment primarily includes the results of
our brokerage operations (Canada Brokerlink, Grey Power and Equisure) and
other activities.

    
    Table 9
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
                          2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Distribution income    32.6     30.3     7.6%     56.4     49.3    14.4%
    -------------------------------------------------------------------------
    Distribution expenses  21.3     17.6    21.0%     42.6     32.3    31.9%
    -------------------------------------------------------------------------
    Distribution earnings  11.3     12.7  (11.0)%     13.8     17.0  (18.8)%
    -------------------------------------------------------------------------
    Other income, net       6.7      3.1   116.1%     22.4      8.4   166.7%
    -------------------------------------------------------------------------
    Interest on debt          -      2.0 (100.0)%        -      4.0 (100.0)%
    -------------------------------------------------------------------------
    Income before income
     taxes                 18.0     13.8    30.4%     36.3     21.4    69.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distribution income and expenses have increased in line with growth in the
Company's network of affiliated independent brokerages (Affiliated
Distribution Network). Other income in the second quarter includes a reduction
to a provision established for a prior year divestiture that became redundant.
The reduction was $16.0 million in the second quarter and $28.0 million
year-to-date.

    SECTION 6 - SUMMARY OF QUARTERLY RESULTS

    Table 10
    -------------------------------------------------------------------------
                                                 2007              2006
    -------------------------------------------------------------------------
                                             Q2       Q1       Q4       Q3
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Written insured risks (thousands)     1,399.7    950.4  1,051.1  1,242.9
    -------------------------------------------------------------------------
    Direct premiums written
     (excluding pools)                    1,209.8    846.3    955.6  1,059.1
    -------------------------------------------------------------------------
    Total revenues                        1,152.2  1,099.6  1,095.8  1,080.2
    -------------------------------------------------------------------------
    Underwriting income                      92.3     40.3     62.3     95.9
    -------------------------------------------------------------------------
    Net income                              194.3    126.2    109.4    156.8
    -------------------------------------------------------------------------
    Combined ratio (%)                       90.6     95.8     93.6     89.9
    -------------------------------------------------------------------------
    EPS-basic/diluted (dollars)              1.56     0.95     0.82     1.17
    -------------------------------------------------------------------------
    (Favourable) prior year claims
     development                            (37.6)   (12.2)   (24.3)   (69.1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                 2006             2005
    -------------------------------------------------------------------------
                                             Q2       Q1       Q4       Q3
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Written insured risks (thousands)     1,356.1    914.9  1,012.7  1,195.2
    -------------------------------------------------------------------------
    Direct premiums written
     (excluding pools)                    1,166.4    812.5    913.6    997.1
    -------------------------------------------------------------------------
    Total revenues                        1,096.7  1,133.8  1,111.6  1,123.3
    -------------------------------------------------------------------------
    Underwriting income                     165.6     79.9    126.3    116.7
    -------------------------------------------------------------------------
    Net income                              205.9    185.9    196.9    202.8
    -------------------------------------------------------------------------
    Combined ratio (%)                       82.7     91.5     86.9     87.7
    -------------------------------------------------------------------------
    EPS-basic/diluted (dollars)              1.54     1.39     1.47     1.52
    -------------------------------------------------------------------------
    (Favourable) prior year claims
     development                            (39.5)   (37.0)   (49.0)   (93.6)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The insurance business is seasonal in nature. While our underwriting
revenues are generally stable from quarter to quarter, underwriting income is
typically higher in the second and third quarters of each year. This is driven
by lower combined ratios in those periods, which is reflected in the seasonal
index below.

    Seasonal indicator

    Table 11
    -------------------------------------------------------------------------
                   2006      2005      2004      2003      Four-year average
    -------------------------------------------------------------------------
    Q1             1.02      1.02      1.10      1.06            1.05
    -------------------------------------------------------------------------
    Q2             0.93      0.94      0.92      0.95            0.93
    -------------------------------------------------------------------------
    Q3             1.01      1.02      0.98      0.96            0.99
    -------------------------------------------------------------------------
    Q4             1.05      1.01      1.01      1.04            1.03
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The seasonal indicator is a non-GAAP measure which represents the ratio of
the quarterly combined ratio to the annual combined ratio.

    SECTION 7 - FINANCIAL CONDITION

    7.1 Balance Sheet Analysis

    The table below shows the balance sheet as reported on December 31, 2006
compared to the one as at January 1, 2007 after adopting the new accounting
standards as well as the one as at June 30, 2007.

    Table 12
    -------------------------------------------------------------------------
                                                             As at
    -------------------------------------------------------------------------
                                                 June 30,   Jan. 1,  Dec. 31,
                                                    2007      2007      2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Cash and cash equivalents                        5.6     125.9     125.9
    -------------------------------------------------------------------------
    Invested assets                              7,059.5   7,503.9   7,241.9
    -------------------------------------------------------------------------
    Premiums receivables                         1,478.7   1,366.9   1,366.9
    -------------------------------------------------------------------------
    Accrued interest and dividend income            54.8      51.1      51.1
    -------------------------------------------------------------------------
    Other receivables                              394.3     282.8     282.8
    -------------------------------------------------------------------------
    Deferred acquisition costs                     375.9     372.8     372.8
    -------------------------------------------------------------------------
    Reinsurance assets                             266.2     290.1     288.1
    -------------------------------------------------------------------------
    Other assets                                   252.6     246.0     246.0
    -------------------------------------------------------------------------
    Income taxes receivable                        133.6      54.1      54.1
    -------------------------------------------------------------------------
    Future income tax asset                         69.9      55.5     119.2
    -------------------------------------------------------------------------
    Intangible assets and goodwill                 227.1     228.5     228.5
    -------------------------------------------------------------------------
    Total assets                                10,318.2  10,577.6  10,377.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Claims liabilities                           3,878.8   3,841.5   3,823.5
    -------------------------------------------------------------------------
    Unearned premiums                            2,341.1   2,264.1   2,264.1
    -------------------------------------------------------------------------
    Other liabilities                              902.2     922.4     844.9
    -------------------------------------------------------------------------
    Income taxes payable                            16.1      24.0      24.0
    -------------------------------------------------------------------------
    Total liabilities                            7,138.2   7,052.0   6,956.5
    -------------------------------------------------------------------------
    Share capital                                1,101.9   1,183.9   1,183.9
    -------------------------------------------------------------------------
    Contributed surplus                             96.8      93.5      93.5
    -------------------------------------------------------------------------
    Retained earnings                            1,970.8   2,139.1   2,143.4
    -------------------------------------------------------------------------
    AOCI                                            10.5     109.1         -
    -------------------------------------------------------------------------
    Total shareholders' equity                   3,180.0   3,525.6   3,420.8
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity  10,318.2  10,577.6  10,377.3
    -------------------------------------------------------------------------
    Book value per share                           25.55     26.40     25.58
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The following analysis of the balance sheet is divided in two sections,
one describing the impact of the adoption of new accounting standards as
described below on January 1, 2007 and one describing the significant
variances on selected items at the end of Q2 07 after reflecting the
successful completion of the share buy-back of March 30, 2007.

    Impact of the adoption of new accounting standards on January 1, 2007

    The adoption of new accounting standards on January 1, 2007 has increased
net assets by $104.8 million as follows:

    
    -   Invested assets increased by $262.0 million to reflect the difference
        between their book values and fair values on December 31, 2006. Also
        included is the value of derivatives embedded in our preferred shares
        which was not previously recognized for $71.6 million, an amount
        subject to refinement, as well as a $9.2 million reduction of fair
        values to reflect bid/ask prices rather than closing prices in the
        valuation of investments. Historically, we disclosed fair values of
        invested assets based on closing prices.

    -   Claims liabilities increased by $18.0 million to reflect discounting
        at rates reflecting market conditions rather than book rates as was
        the case in prior periods. The adjustment also affects reinsurance
        assets as the reinsurers' share of the claims liabilities was
        increased by $2.0 million for the same reasons.

    -   Other liabilities increased by $77.6 million to reflect the
        difference between the book values and fair values of short
        securities and the value of the embedded derivatives discussed above
        of $71.6 million, also subject to refinement.

    -   The changes above were all tax-affected and as a result, the future
        income tax asset was reduced by $63.7 million.

    The impact of the above changes is reflected in different accounts of
shareholders' equity depending on whether they are classified as
held-for-trading or available for sale. In summary:

    -   Retained earnings were reduced by $4.3 million, due to the changes
        which relate to instruments classified or designated as held-for-
        trading and net claims liabilities.

    -   AOCI, a new component of shareholders' equity, increased by
        $109.1 million being the change related to assets classified as
        available for sale (see table 14).
    

    Review of selected accounts at the end of Q2 07 compared to January 1,
    2007

    Invested assets decreased $444.4 million mainly due to the share buyback
of $501.1 million in the first quarter. During the second quarter, short-term
securities were transferred to invested assets.

    Other receivables, deferred acquisition costs and unearned premiums are
higher due to the seasonality of sales between quarters. A portion of deferred
acquisition costs related to prior acquisitions were reclassified to goodwill
during the quarter.

    Income taxes receivable are higher due to the timing of tax payments.

    Claims liabilities are up slightly in the quarter due to a higher number
of policies in force. Note 4 of the Unaudited Interim Consolidated Financial
Statements provides a full reconciliation of the changes in claims
liabilities.

    Market yield adjustment

    Claims liabilities are measured using accepted actuarial practice, taking
into account the time value of money and provisions for adverse deviations.
Changes in these estimates will affect the valuation of claims liabilities.
Prior to 2007, claims liabilities were discounted using book rates which were
generally adjusted annually. Claims liabilities are now discounted at rates
reflecting current market conditions, according to new accounting principles
introduced at the beginning of the year. A significant increase in interest
rates in the second quarter of 2007 resulted in a $40.8 million reduction of
claims liabilities which had a positive impact on underwriting income and net
operating income in the period. Of the $40.8 million, $33.9 million affected
prior year claims development.
    Under the new accounting standards, we have classified certain debt
securities as held-for-trading. The effect of changes in the market value of
these securities is reflected in income. The impact on net income was minimal
as a result of the adjustment to held-for-trading debt securities and the
market yield adjustment to claims liabilities.
    While the new accounting standards became effective in January 2007,
interest rates were relatively unchanged at the end of first quarter compared
to December 31, 2006; therefore, the market yield adjustment to claims
liabilities and held-for-trading securities was immaterial in the first
quarter.
    The following table shows the development of the claims liabilities for
the 10 most recent accident years, with subsequent development during the
periods. The original reserve estimates are revaluated quarterly for
redundancy or deficiency. This revaluation is based on actual payments in full
or partial settlement of claims as well as on current estimates of claims
liabilities for claims still open or claims still unreported.

    
    Table 13
    -------------------------------------------------------------------------
                                               Accident Year
    -------------------------------------------------------------------------
                          Total     2006     2005     2004     2003     2002
    -------------------------------------------------------------------------
    Original reserve             1,178.0  1,118.8  1,117.7    973.2    838.6
    -------------------------------------------------------------------------
    Development during
     Q2 2007              (37.6)    (2.4)    (8.9)    (8.8)    (4.4)    (1.2)
    -------------------------------------------------------------------------
    As a % of original
     reserve                      (0.2)%   (0.8)%   (0.8)%   (0.5)%   (0.1)%
    -------------------------------------------------------------------------
    Development during
     YTD 2007             (49.8)    17.5    (20.3)   (16.7)    (4.0)    (2.5)
    -------------------------------------------------------------------------
    As a % of original
     reserve                        1.5%   (1.8)%   (1.5)%   (0.4)%   (0.3)%
    -------------------------------------------------------------------------
    Cumulative
     development                    17.5    (78.2)  (207.7)  (178.5)   (20.8)
    -------------------------------------------------------------------------
    As a % of original
     reserve                        1.5%   (7.0)%  (18.6)%  (18.3)%   (2.5)%
    -------------------------------------------------------------------------


    ----------------------------------------------------------------
                                         Accident Year
    ----------------------------------------------------------------
                           2001     2000     1999     1998     1997
                                                                & -
    ----------------------------------------------------------------
    Original reserve      729.0    655.5    587.0    548.1  1,276.9
    ----------------------------------------------------------------
    Development during
     Q2 2007               (4.8)    (3.7)     7.3    (10.8)     0.0
    ----------------------------------------------------------------
    As a % of original
     reserve             (0.7)%   (0.6)%     1.3%   (2.0)%     0.0%
    ----------------------------------------------------------------
    Development during
     YTD 2007              (5.5)    (4.7)     6.3    (12.4)    (7.6)
    ----------------------------------------------------------------
    As a % of original
     reserve             (0.7)%   (0.7)%     1.1%   (2.3)%   (0.6)%
    ----------------------------------------------------------------
    Cumulative
     development           43.6     31.7     45.8    (20.7)  (177.6)
    ----------------------------------------------------------------
    As a % of original
     reserve               6.0%     4.8%     7.8%   (3.8)%  (13.9)%
    ----------------------------------------------------------------
    ----------------------------------------------------------------
    

    The $18.0 million decrease in direct claims liabilities related to the
transition to new accounting standards was added to the opening claims
liabilities but is reflected in the table above only for the portion
($4.9 million) that relates to the 2006 accident year. Other original reserve
amounts have not been restated in this table.

    Other liabilities are down due to the reduction of prior year's accruals.

    Shareholders' equity was reduced significantly as a result of the share
buy-back. The total cost of the purchase was $501.1 million, including
expenses net of income taxes. An amount of $82.0 million was deducted from
share capital and the remainder from retained earnings. The unaudited interim
statement of changes in shareholders' equity provides a complete
reconciliation of the changes that occurred during the quarter. There are
124,472,761 outstanding common shares as of August 7, 2007.

    Accumulated other comprehensive income is a new component of
shareholders' equity. It reflects the unrealized gains or losses related to
available for sale assets.

    
    Table 14
    -------------------------------------------------------------------------
                                                   Six months ended June 30
    -------------------------------------------------------------------------
                                                 Pre-tax    Taxes  After-tax
    -------------------------------------------------------------------------
    Unrealized gains as reported on
     December 31, 2006                             201.3       n/a       n/a
    -------------------------------------------------------------------------
    Items not included in AOCI                      (2.8)      n/a       n/a
    -------------------------------------------------------------------------
    Reduction to recognize fair values
     at the bid/ask price                           (9.2)      n/a       n/a
    -------------------------------------------------------------------------
    Transfers to retained earnings for
     held-for-trading instruments                  (14.8)      n/a       n/a
    -------------------------------------------------------------------------
    Opening AOCI balance                           174.5     (65.4)    109.1
    -------------------------------------------------------------------------
    Changes in fair values during the period       (54.0)     22.5     (31.5)
    -------------------------------------------------------------------------
    Realized gains reclassified to income
     during the period                            (108.1)     41.0     (67.1)
    -------------------------------------------------------------------------
    AOCI as at June 30, 2007                        12.4      (1.9)     10.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The table above shows how the unrealized gains reported as at
December 31, 2006 have been treated at the transition date and subsequently in
the first half of the year. On transition, the fair values were adjusted
downwards to reflect bid/ask prices rather than closing prices. Unrealized
gains on held-for-trading instruments were transferred to retained earnings on
January 1, 2007 consistent with the new accounting standards. These unrealized
gains will not flow through the income statement in the future.
    Unrealized gains on available for sale assets were $174.5 million after
transition on January 1, 2007. During the first half of the year, the Company
sold available for sale assets resulting in realized net gains of
$67.1 million. These were transferred to net gains on invested assets and
other gains in the income statement. Available for sale assets lost value
during the first six months of the year, representing a reduction of
$31.5 million in AOCI.

    7.2 Liquidity and Capital Resources

    Cash Flows and Liquidities

    
    Table 15
    -------------------------------------------------------------------------
                            Three months ended          Six months ended
                                 June 30                     June 30
    -------------------------------------------------------------------------
    Selected inflows
     and (outflows)       2007     2006    Change    2007     2006    Change
    -------------------------------------------------------------------------
    Operating activities:
    -------------------------------------------------------------------------
    Cash provided by
     operating
     activities           202.1    232.1  (12.9)%    104.6    130.9   (20.1)%
    -------------------------------------------------------------------------
    Investing activities:
    -------------------------------------------------------------------------
    Net (purchases)
     proceeds from the
     sale of invested
     assets              (249.1)  (544.1) (54.2)%    358.7   (185.0) (293.9)%
    -------------------------------------------------------------------------
    Financing activities:
    -------------------------------------------------------------------------
      Dividends paid      (33.6)   (33.4)    0.6%    (69.7)  (66.9)      4.2%
    -------------------------------------------------------------------------
      Redemption of
       common shares for
       Cancellation           -        -        -   (501.1)      -          -
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Cash at the end
     of the quarter         5.6    185.6   (97.0)%     5.6   185.6    (97.0)%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Cash flows from operating activities were similar in 2007 compared to
2006 both for the second quarter and year-to-date. In the second quarter, the
cash provided by operating activities was entirely invested except for the
amount paid as dividends.
    During the previous quarter, the share buyback used $501.1 million of
cash. Year-to-date, dividends paid used another $69.7 million. To cover these
outflows, the Company sold invested assets of $358.7 million, most of which
were held in short-term notes.

    Capital Management

    The Company has ample capital to support business growth with our
insurance subsidiaries having capital of $454.5 million in excess of the
minimum supervisory target of 150%, as calculated under the Minimum Capital
Test ("MCT") at June 30, 2007. During Q2 07, the P&C subsidiaries paid to the
holding company dividends of $77.0 million net of capital injections, thus
reducing the excess over MCT.
    The following table presents the minimum capital test of our insurance
subsidiaries with a total for all companies.

    
    Table 16
    -------------------------------------------------------------------------
    MCT - P&C COMPANIES
    -------------------------------------------------------------------------
               ING       Belair     Nordic   ING Novex  Trafalgar
            Insurance  Insurance  Insurance  Insurance  Insurance      Total
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    At June 30,
     2007
    -------------------------------------------------------------------------
    Total
     capital
     available  948.4      196.2      826.7      140.5      125.0    2,236.8
    -------------------------------------------------------------------------
    Total
     capital
     required   516.6       93.7      453.0       66.2       58.7    1,188.2
    -------------------------------------------------------------------------
    Excess
     capital    431.8      102.5      373.7       74.3       66.3    1,048.6
    -------------------------------------------------------------------------
    MCT %      183.6%     209.5%     182.5%     212.3%     212.8%     188.2%
    -------------------------------------------------------------------------
    Excess
     at 150%    173.5       55.7      147.1       41.3       36.9      454.5
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    At
     December 31,
     2006
    -------------------------------------------------------------------------
    Total
     capital
     avail-
     able     1,073.7      282.0      966.8       49.3       61.7    2,433.5
    -------------------------------------------------------------------------
    Total
     capital
     required   554.5      104.8      466.8       14.4       18.2    1,158.7
    -------------------------------------------------------------------------
    Excess
     capital    519.2      177.2      500.0       34.9       43.5    1,274.8
    MCT %      193.6%     269.0%     207.1%     341.2%     338.8%     210.0%
    Excess
     at 150%    242.0      124.8      266.7       27.6       34.4      695.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    On February 13, 2007, the Board of Directors increased the Company's
quarterly dividend by 2.0 cents to 27.0 cents, an 8.0% increase. A quarterly
cash dividend of 27.0 cents per common share was paid on June 29, 2007 and
March 30, 2007.

    Credit ratings

    ING Canada Group has an A+ (Superior) rating from A.M. Best, which was
reaffirmed by them on July 3, 2007. Our primary insurance subsidiaries are
rated A+ by Standard & Poor's, and ING Canada Inc.'s senior unsecured debt is
rated A (low) by DBRS.

    SECTION 8 - ACCOUNTING AND DISCLOSURE MATTERS

    8.1 Internal Control over Financial Reporting

    No changes in the Company's internal control over financial reporting
occurred during the interim period ending on June 30, 2007 that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

    8.2 Critical Accounting Estimates and Assumptions

    There are no new critical accounting estimates or assumptions compared to
the information provided in the annual MD&A. However, some estimates were
modified or applied differently following the adoption of the new accounting
standards related to financial instruments:

    
    -   Net claims liabilities are now discounted using a rate reflecting
        market condition instead of a book rate. The value of the net claims
        liabilities carried on the consolidated balance sheet was then
        impacted.
    -   The changes in fair values of invested assets designated or
        classified as held-for-trading are now fully recognized in the
        consolidated statement of income, therefore impairment does not apply
        to these assets any longer. The impairment of invested assets is then
        applicable only to invested assets designated as available for sale
        and to loans.
    -   The derivatives embedded in our preferred shares are now carried
        separately from these preferred shares. The fair values of these
        embedded derivatives are determined based on one of a number of
        valuation techniques requiring judgment. Our final choice of
        valuation technique would not have any significant impact on the
        consolidated statement of income for the first half of the year.
    

    8.3 Impact of New Accounting Standards

    Financial Instruments, Comprehensive Income and Hedges

    Effective January 1, 2007, the Company adopted the new provisions of the
Canadian Institute of Chartered Accountants ("CICA") handbook on accounting
for financial instruments, including sections 3855 "Financial Instruments -
Recognition and Measurement", 3865 "Hedges" and 1530 "Comprehensive income".
    The new provisions affected our accounting for financial instruments and
hedges and introduced a new statement of comprehensive income and a new
component of AOCI within our shareholders' equity. The impact on the Company's
financial statements has been fully discussed earlier in the MD&A.
Complementary information is presented below.
    As per the standards, we classified or designated our financial assets
and liabilities as held-for-trading, available for sale or loans and
receivables.

    
    -   For assets classified as available for sale, the unrealized changes
        in fair values are reflected in other comprehensive income until the
        financial asset is disposed of, or becomes impaired. A portion of
        unrealized net gains as at January 1, 2007, was accounted for as an
        opening adjustment to AOCI.
    -   We designated a portion of our invested assets supporting net claims
        liabilities, as held-for-trading, under which the unrealized gains
        and losses are recognized in income. Such classification reduces
        income statement volatility related to the changes in fair values of
        net claims liabilities as described below. Other financial assets and
        liabilities, including all derivatives and embedded derivatives, are
        also classified as held-for-trading according to the new standards.
        Unrealized net gains related to investments designated or classified
        as held-for-trading as at January 1, 2007, have been accounted for as
        an adjustment to retained earnings.
    -   The net claims liabilities have been discounted using a rate
        reflecting market conditions instead of a book rate and an adjustment
        to the amount of net claims liabilities as at January 1, 2007, has
        been recorded to retained earnings following the change.
    -   Certain instruments have been designated as loans and receivables.
        These classifications had no significant impact as the invested
        assets continue to be carried at amortized cost.
    -   For our insurance subsidiaries, the Superintendent of Financial
        Institutions, Canada has imposed certain restrictions under guideline
        D-10, on the classification of assets as held-for-trading and we have
        respected these requirements.
    

    Accounting Changes

    Effective January 1, 2007, we applied the revised provisions of the CICA
handbook section 1506 "Accounting changes". Accordingly, voluntary changes in
accounting policies will be made only if they result in reliable and more
relevant information.

    Variability in Variable Interest Entities

    Effective January 1, 2007, we applied the Emerging Issues Committee (EIC)
Abstract No. 163, "Determining the Variability to be Considered in Applying
AcG-15". This EIC provides additional clarification on how to analyze and
consolidate variable interest entities. The impact was not significant on our
consolidated financial statements.

    Harmonization of Canadian GAAP to International Financial Reporting
    Standards

    In 2005, the Accounting Standards Board finalized its strategic plan for
financial reporting in Canada whereby Canadian GAAP will converge with
International Financial Reporting Standards over a five-year period. After
this transitional period, we will cease to use Canadian GAAP. The Company will
continue to monitor the changes resulting from this transition.

    SECTION 9 - RISK MANAGEMENT PRINCIPLES AND RESPONSIBILTIES

    There were no significant changes from the information provided in the
annual MD&A.

    SECTION 10 - OTHER MATTERS

    10.1 Related Party Transactions

    
    We have ongoing transactions with related parties consisting mostly of:

    -   Management and advisory services;
    -   Reinsurance by an affiliated company; and
    -   Financing.
    

    These transactions are carried out in the normal course of operations and
are measured at the amount of consideration paid or received as established
and agreed by the related parties. We believe that such exchange amounts
approximate fair value.
    In addition, we have related party transactions with investees accounted
for as long-term investments. These transactions consist primarily of loans
and commission expenses.
    Note 6 to the accompanying Unaudited Interim Consolidated Financial
Statements provides additional information on related party transactions.
    On February 16, 2007, the Autorité des marchés financiers ("AMF"), the
regulatory and oversight body for Quebec's financial sector, announced that
Equisure Financial Network Inc. ("Equisure"), a subsidiary of the Company, has
complied with all commitments undertaken by the Company under the agreement
reached in December 2005. The AMF and Equisure have further agreed on the
improvements that need to be made to the corporate structures of the property
and casualty ("P&C") brokerages covered by the agreement; these agreed upon
structures meet the AMF's requirement and comply with current legislation.

    10.2 Cautionary Note Regarding Forward-Looking Statements

    Certain statements in this report about our current and future plans,
expectations and intentions, results, levels of activity, performance, goals
or achievements or any other future events or developments are forward-looking
statements. The words "may", "will", "would", "should", "could", "expects",
"plans", "intends", "anticipates", "believes", "estimates", "predicts",
"likely" or "potential" or the negative or other variations of these words or
other similar words or phrases identify such forward-looking statements.
    Forward-looking statements are based on estimates and assumptions made by
us based on our experience and view of historical trends, current conditions
and expected future developments, as well as other factors that we believe are
appropriate in the circumstances. Many factors could cause our actual results,
performance or achievements or future events or developments to differ
materially from the forward-looking statements. These factors include, without
limitation, the following: our ability to implement our strategy or operate
our business as we expect; our ability to accurately assess the risks
associated with the insurance policies that we write; unfavourable capital
market developments or other factors which could affect our investments; the
cyclical nature of the P&C insurance industry; our ability to accurately
predict future claims frequency; government regulations; litigation and
regulatory actions; periodic negative publicity regarding the insurance
industry; intense competition; our reliance on brokers and third parties to
sell our products; our ability to successfully pursue our acquisition
strategy; the significant influence of ING Groep; our participation in the
Facility Association (a mandatory pooling arrangement among all industry
participants); terrorist attacks and ensuing events; the occurrence of
catastrophic events; our ability to maintain our financial strength ratings;
our ability to alleviate risk through reinsurance; our ability to successfully
manage credit risk; our reliance on information technology and
telecommunications systems; our dependence on key employees; general economic,
financial and political conditions; our dependence on the results of
operations of our subsidiaries; the limited trading history of our common
shares; the accuracy of analyst earnings estimates or the consensus figure
based upon such estimates; the volatility of the stock market and other
factors affecting our share price; and future sales of a substantial number of
our common shares. These factors should be considered carefully, and readers
should not place undue reliance on our forward-looking statements. We have no
intention and accept no responsibility to update or revise any forward-looking
statements as a result of new information, future events or otherwise, except
as required by law.



    
    ING Canada Inc.

    Unaudited interim consolidated financial statements

    Second quarter 2007


    ING Canada Inc.

    UNAUDITED CONSOLIDATED BALANCE SHEET
    (in thousands of dollars)
    -------------------------------------------------------------------------
                                                      At             At
                                                    June 30      December 31
                                                     2007           2006
    -------------------------------------------------------------------------
    Assets

    Cash and cash equivalents                     $     5,614    $   125,954
    Invested assets (note 3)
      Debt securities                               3,506,919      3,972,243
      Equity securities                             3,312,258      3,040,848
      Loans and equity investments                    240,359        228,847
                                                  ---------------------------
                                                    7,059,536      7,241,938

    Premium receivables                             1,478,658      1,366,942
    Accrued interest and dividend income               54,758         51,068
    Other receivables                                 394,344        282,828
    Deferred acquisition costs                        375,850        372,772
    Reinsurance assets                                266,220        288,052
    Other assets                                      252,602        245,992
    Income taxes receivable                           133,581         54,134
    Future income tax asset                            69,858        119,196
    Intangible assets                                  66,369         66,294
    Goodwill                                          160,798        162,099
    -------------------------------------------------------------------------

                                                  $10,318,188    $10,377,269
    -------------------------------------------------------------------------
    Liabilities

    Claims liabilities (note 4)                   $ 3,878,744    $ 3,823,539
    Unearned premiums                               2,341,179      2,264,118
    Other liabilities                                 902,218        844,873
    Income taxes payable                               16,101         23,984
                                                  ---------------------------
                                                    7,138,242      6,956,514
    Shareholders' equity

    Share capital (note 5)                          1,101,881      1,183,846
    Contributed surplus                                96,740         93,534
    Retained earnings                               1,970,770      2,143,375
    Accumulated other comprehensive income             10,555              -
                                                  ---------------------------
                                                    3,179,946      3,420,755
    -------------------------------------------------------------------------

                                                  $10,318,188    $10,377,269
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    ING Canada Inc.

    UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
     INCOME
    (in thousands of dollars, except as otherwise noted)
    -------------------------------------------------------------------------
                               For the three months     For the six months
                                   ended June 30           ended June 30
    -------------------------------------------------------------------------
                                 2007        2006        2007        2006
    -------------------------------------------------------------------------
    Revenues

    Premiums written
      Direct                  $1,205,146  $1,176,136  $2,059,151  $1,988,649
      Ceded                       25,445      20,885      48,604      48,039
                              -----------------------------------------------
      Net                      1,179,701   1,155,251   2,010,547   1,940,610
    Changes in net unearned
     premiums                   (203,042)   (199,546)    (77,219)    (48,017)
                              -----------------------------------------------
    Net premiums earned          976,659     955,705   1,933,328   1,892,593
    Interest and dividend
     income                       91,952      87,311     183,450     166,295
    Net gains on invested
     assets and other gains       53,600      34,785      79,679     142,462
    Distribution and other        30,047      18,753      55,483      29,040
    -------------------------------------------------------------------------
                               1,152,258   1,096,554   2,251,940   2,230,390

    Expenses

    Underwriting
      Claims                     601,280     497,847   1,226,860   1,055,333
      Commissions                147,605     154,766     301,200     317,922
      Premium taxes               33,970      33,201      67,601      65,268
      General expenses           101,517     104,245     205,042     208,485
                              -----------------------------------------------
                                 884,372     790,059   1,800,703   1,647,008
    Distribution and other        17,069       8,821      29,000      15,288
    Interest                           -       1,990           -       3,981
                              -----------------------------------------------
                                 901,441     800,870   1,829,703   1,666,277

    -------------------------------------------------------------------------
    Income before income taxes   250,817     295,684     422,237     564,113
    Income taxes                  56,491      89,744     101,674     172,271
    -------------------------------------------------------------------------

    Net income                $  194,326  $  205,940  $  320,563  $  391,842
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Unrealized losses on
     available for sale
     securities
      Increase during the
       period                    (72,978)          -     (53,976)          -
      Income taxes                28,204           -      22,562           -
                              -----------------------------------------------
                                 (44,774)          -     (31,414)          -
    Reclassified to income
      Realized gains             (83,300)          -    (108,122)          -
      Income taxes                27,571           -      41,019           -
                              -----------------------------------------------
                                 (55,729)          -     (67,103)          -
    -------------------------------------------------------------------------
    Other comprehensive income  (100,503)          -     (98,517)          -

    Comprehensive
     income                   $   93,823  $        -  $  222,046  $        -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share, basic
     and diluted (dollars)    $     1.56  $     1.54  $     2.49  $     2.93
    Dividends per share
     (dollars)                      0.27        0.25        0.54        0.50
    Basic and diluted average
     number of common shares
     (in thousands)               124,473    133,732     128,974     133,732
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    ING Canada Inc.

    UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN
    SHAREHOLDERS' EQUITY
    (in thousands of dollars)
                                                      Accumulated
                                                         other
                     Share    Contributed  Retained  comprehensive
                    capital     surplus    earnings     income       Total
    -------------------------------------------------------------------------
    Balance as at
     December 31,
     2006         $1,183,846  $   93,534  $2,143,375  $        -  $3,420,755
    Transition
     adjustments
     (note 2)              -           -      (4,274)    109,072     104,798
    Comprehensive
     income                -           -     320,563     (98,517)    222,046
    Common shares
     purchased for
     cancellation
     (note 5)        (81,965)          -    (419,179)          -    (501,144)
    Dividends paid         -           -     (69,715)          -     (69,715)
    Stock-based
     compensation          -       3,206           -           -       3,206
    -------------------------------------------------------------------------
    Balance as at
     June 30,
     2007         $1,101,881  $   96,740  $1,970,770  $   10,555  $3,179,946
    -------------------------------------------------------------------------
    Balance as at
     December 31,
     2005         $1,183,846  $   89,713  $1,619,054  $        -  $2,892,613
    Net income             -           -     391,842           -     391,842
    Dividends paid         -           -     (66,866)          -     (66,866)
    Stock-based
     compensation          -       1,910           -           -       1,910
    -------------------------------------------------------------------------
    Balance as at
     June 30,
     2006         $1,183,846  $   91,623  $1,944,030  $        -  $3,219,499
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
    (in thousands of dollars)
    -------------------------------------------------------------------------
                               For the three months     For the six months
                                   ended June 30           ended June 30
    -------------------------------------------------------------------------
                                 2007        2006        2007        2006
    -------------------------------------------------------------------------

    Operating activities

    Net income                $  194,326  $  205,940  $  320,563  $  391,842
    Adjustments for non-cash
     items                       165,021     175,092      50,365     (34,712)
    Changes in net claims
     liabilities                  18,242     (11,823)     60,953     (17,650)
    Changes in other
     operating assets
     and liabilities            (175,448)   (137,144)   (327,271)   (208,556)
                              -----------------------------------------------
    Cash provided by
     operating activities        202,141     232,065     104,610     130,924

    Investing activities

    Proceeds from sale
     of invested assets        3,492,627   3,390,008   7,754,218   9,708,241
    Purchase of invested
     assets                   (3,741,680) (3,934,160) (7,395,477) (9,893,282)
    Proceeds from sale and
     leaseback of properties           -           -           -      29,803
    Purchase of property and
     equipment and other          (4,799)    (46,508)    (12,832)    (64,346)
                              -----------------------------------------------
    Cash (used in) provided
     by investing activities    (253,852)   (590,660)    345,909    (219,584)

    Financing activities

    Purchase of common shares
     for cancellation                  -           -    (501,144)          -
    Dividends paid               (33,607)    (33,433)    (69,715)    (66,866)
                              -----------------------------------------------
    Cash used in financing
     activities                  (33,607)    (33,433)   (570,859)    (66,866)
    -------------------------------------------------------------------------
    Net decrease in cash and
     cash equivalents            (85,318)   (392,028)   (120,340)   (155,526)
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     beginning of period          90,932     577,640     125,954     341,138
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period            $    5,614  $  185,612  $    5,614  $  185,612
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    ING Canada Inc.

    NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
    (in thousands of dollars, except as otherwise noted)
    -------------------------------------------------------------------------

    1.  Basis of presentation

        These interim consolidated financial statements have been prepared in
        accordance with Canadian generally accepted accounting principles for
        interim financial statements and do not include all the information
        required for complete financial statements. Except as described
        below, these interim consolidated financial statements use the same
        accounting policies as were used for the Company's consolidated
        financial statements for the year ended December 31, 2006 and should
        be read in conjunction with the Company's annual consolidated
        financial statements for the year then ended.

    2.  New accounting policies

        a) Financial instruments, comprehensive income and hedges

           The Company adopted on January 1, 2007, the new provisions of the
           Canadian Institute of Chartered Accountants ("CICA") handbook on
           accounting for financial instruments, including sections 3855
           "Financial Instruments - Recognition and Measurement", 3865
           "Hedges" and 1530 "Comprehensive income".

           The impact of these changes, as explained in detail below, was
           significant on the Company's interim consolidated balance sheet
           and note disclosures. The impact was however not significant on
           the Company's interim consolidated statement of income. The
           Company also changed some grouping and descriptions in its
           consolidated financial statements to better disclose its financial
           position and results.

           i) Transition adjustments

           The new standards were applied on January 1, 2007 on a retroactive
           basis without prior period restatement, in accordance with the
           applicable transitional provisions. The significant changes were:

           1. Classification or designation of all financial assets and
              liabilities in one of these three categories:

                 -  available for sale ("AFS")
                 -  held-for-trading ("HFT")
                 -  loans and receivables

           2. Revaluation of most of the AFS assets and all the HFT assets
              and liabilities at their fair value and these, under the new
              standards, are determined based on the bid or ask price,
              respectively. The Company was previously disclosing fair values
              based on the closing price. The differences between the book
              values at December 31, 2006 and the fair values at January 1,
              2007 were recorded either in opening retained earnings or
              opening accumulated other comprehensive income ("AOCI"),
              according to the classification or designation of the specific
              asset or liability.

           3. As a consequential effect of the changes above, the claims
              liabilities, net of reinsurance ("net claims liabilities") were
              recalculated at January 1, 2007 using a rate reflecting market
              condition instead of a book rate. The difference between the
              amount of net claims at December 31, 2006 and at January 1,
              2007 was recorded as a transitional adjustment in opening
              retained earnings.


        Table 2.1   Transition adjustments per balance sheet item
        ---------------------------------------------------------------------
                                         December 31,  Transition  January 1,
                                              2006    adjustments     2007
        ---------------------------------------------------------------------
        Assets

        Invested assets
          Debt securities                    3,972,243     21,760  3,994,003
          Equity securities                  3,040,848    240,250  3,281,098
          Mortgage loans                        57,218          -     57,218
          Broker loans and equity
           investments                         171,629          -    171,629
                                             --------------------------------
                                             7,241,938    262,010  7,503,948
        Reinsurance assets                     270,369      2,032    272,401
        Future income tax asset                112,187    (63,682)    48,505
        ---------------------------------------------------------------------
                                                          200,360
        ---------------------------------------------------------------------
        Liabilities

        Other liabilities
          Short securities                      57,093      5,142     62,235
          Derivative financial instruments       3,522        824      4,346
          Embedded derivatives                       -     71,636     71,636

        Claims liabilities                   3,823,539     17,960  3,841,499
                                             --------------------------------
                                                           95,562
        Shareholders' equity

        Retained earnings                    2,143,375     (4,274) 2,139,101
        Accumulated other comprehensive
         income                                      -    109,072    109,072
                                             --------------------------------
                                                          104,798
        ---------------------------------------------------------------------
                                                          200,360
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        Table 2.2   Classification and designation at January 1, 2007
        ---------------------------------------------------------------------
                                  Classified Designated
                          AFS       as HFT     as HFT     Loans      Total
        ---------------------------------------------------------------------
        Debt securities
          Short-term
           notes         713,475          -          -          -    713,475
          Fixed income
           securities  1,248,268          -  2,032,260          -  3,280,528
        Equity
         securities
          Preferred
           shares      1,583,645          -          -          -  1,583,645
          Common
           shares      1,407,031     73,914    216,508          -  1,697,453
        Loans and
         equity
         investments
          Mortgage
           loans               -          -          -     57,218     57,218
          Broker loans
           and equity
           investments    14,764          -          -    156,865    171,629
        Short
         securities,
         derivative
         financial
         instruments
         and embedded
         derivatives           -   (138,217)         -          -   (138,217)
        ---------------------------------------------------------------------
        Total          4,967,183    (64,303) 2,248,768    214,083  7,365,731
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        Table 2.3   Transition adjustments at January 1, 2007 (net of income
                    taxes) per classification and designation
        ---------------------------------------------------------------------
                                  Classified Designated
                           AFS       as HFT     as HFT     Loans      Total
        ---------------------------------------------------------------------
        Retained
         earnings            678      1,106      4,624    (10,682)    (4,274)
        Accumulated
         other
         comprehensive
         income          109,072          -          -          -    109,072
        ---------------------------------------------------------------------
                         109,750      1,106      4,624    (10,682)   104,798
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

           ii) Accounting policies now applied

           As per the new accounting standards, the Company classified or
           designated all its financial assets and liabilities as AFS, HFT or
           loans and receivables as at January 1, 2007 (see current
           designation in table 3.1). Each of these categories involve
           different accounting treatments.

           The principal changes and consequential changes in the accounting
           due to the adoption of these accounting standards are described
           below.

           AFS financial assets
           --------------------
           AFS financial assets are carried at fair value on the consolidated
           balance sheet starting on the trade date and the changes in fair
           values are recorded, net of income taxes, in other comprehensive
           income ("OCI") until the financial asset is disposed of, or has
           become other than temporarily ("OTT") impaired. As long as an AFS
           asset is held and not OTT impaired, the gains and losses are not
           recognized in the consolidated statement of income (see current
           unrecognized gains and losses in table 3.2). When the asset is
           disposed of, or has become OTT impaired, the gain or loss is
           recognized in the consolidated statement of income as net gains on
           invested assets and other gains and, accordingly, the amount is
           deducted from OCI. Gains and losses on the sale of AFS assets are
           calculated on a first in, first out basis.

           HFT financial assets and liabilities
           ------------------------------------
           HFT financial assets and liabilities are carried at fair value on
           the consolidated balance sheet starting on the trade date and the
           changes in fair values are recorded in the consolidated statement
           of income as net gains on invested assets and other gains.

           HFT financial assets and liabilities are purchased or incurred
           with the intention of generating profits in the near term
           ("classified as HFT") or are voluntarily so designated by the
           Company ("designated as HFT").

           The Company designated a portion of its fixed income securities
           that are supporting net claims liabilities as HFT. This
           designation will reduce the volatility of the consolidated
           statement of income related to the fluctuations in fair values of
           underlying net claims liabilities. Common shares used in a
           specific strategy were also designated as HFT to offset the
           fluctuations in fair values of their underlying derivative
           financial instruments.

           Other financial assets and liabilities, including all derivative
           financial instruments and embedded derivatives (see below), were
           classified as HFT according to the new standards.

           Loans and receivables
           ---------------------
           Certain financial assets were designated as loans and receivables.
           These financial assets are accounted for at amortized cost using
           the effective interest rate method. As long as a loan or
           receivable is held and not impaired, the gains and losses are not
           recognized in the consolidated statement of income (see current
           unrecognized gains and losses in table 3.2). These designations
           are consistent with the accounting policies under the prior
           standards.

           Net claims liabilities
           ----------------------
           Net claims liabilities were previously discounted using the book
           yield of their supporting invested assets, which was consistent
           with the accounting treatment of these assets carried at amortized
           cost. Under the new accounting standards, these supporting assets
           are now carried at their fair value. As a consequential change of
           the adoption of the new accounting standards, the discount rate
           now used for net claims liabilities reflects the market yield of
           the supporting assets, which is consistent with the new accounting
           treatment of these assets.

           Derivative financial instruments and hedge accounting
           -----------------------------------------------------
           Derivative financial instruments are used for risk management
           ("non-trading") purposes and for trading purposes. Currency swaps
           and forwards, and certain total return swaps are held for non-
           trading purposes to mitigate foreign exchange and market risks.
           Interest rate futures, options and swaps and certain total return
           swaps are held for trading purposes.

           For derivative financial instruments held for non-trading purposes
           where hedge accounting is applied, the accounting policy is as
           follows:

           (i)   The Company formally documents all relationships between
                 hedging instruments and hedged items, as well as its risk
                 management objective and strategy for undertaking its hedge
                 transactions and the method to be used to measure its
                 effectiveness. The Company also formally assesses, both at
                 inception and on an ongoing basis, whether the derivative
                 financial instruments that are used in hedging transactions
                 are effective in offsetting changes in fair values of hedged
                 items.

           (ii)  Hedge accounting is discontinued prospectively when the
                 derivative financial instrument no longer qualifies as an
                 effective hedge or the derivative financial instrument is
                 terminated or sold. Under the previous standards, the fair
                 value of the derivative financial instrument was then
                 accounted for and the related gain or loss was deferred to
                 be included in the consolidated statement of income during
                 the periods in which the hedged item affected earnings.
                 Should the hedged item cease to exist; the gains or losses
                 deferred until then are immediately charged to income.
                 Under the new standards, the cumulative adjustment to the
                 carrying amount of the hedged item is amortized to the
                 consolidated statement of income based on a recalculated
                 effective interest rate over the residual period to
                 maturity; unless the hedged item has been derecognized in
                 which case it is released to the consolidated statement of
                 income immediately.

           (iii) The Company uses hedge accounting only for certain currency
                 swaps used to manage foreign exchange risk related to
                 certain investments in U.S. dollars. Under the previous
                 standards, these derivative financial instruments were
                 recognized at cost and foreign exchange gains and losses
                 related to the hedged items were not recognized until they
                 were settled. Under the new standards, the derivative
                 financial instruments are carried at fair value in the
                 consolidated balance sheet and changes in their fair value
                 are recorded in the consolidated statement of income. The
                 hedged assets are carried at fair value in the consolidated
                 balance sheet and the changes in their fair value
                 attributable to the hedged risk, accordingly to the
                 accounting treatment of the hedging instrument, are
                 recognized also in the consolidated statement of income and
                 the changes in the fair value attributable to other risks
                 are recognized in OCI. Any gain or loss in fair value
                 relating to the ineffective portion of the hedging
                 relationship is recognized immediately in the consolidated
                 statement of income.

           For derivative financial instruments held for non-trading purposes
           where hedge accounting is not applied and for derivative financial
           instruments held for trading purposes, the instruments are
           recognized at their fair value, with changes in the fair value
           reflected in the consolidated statement of income during the
           period in which they arise.

           These changes in accounting policies for derivative financial
           instruments and hedge accounting had no significant impact on the
           Company's consolidated financial statements.

           Embedded derivatives
           --------------------
           A derivative instrument may be embedded in another financial
           instrument (the "host instrument"). Prior to the adoption of the
           new standards, such embedded derivatives were not accounted for
           separately from the host instrument. Under the new standards,
           embedded derivatives are treated as separate derivative financial
           instruments when their economic characteristics and risks are not
           clearly and closely related to those of the host instrument, the
           terms of the embedded derivatives are the same as those of a
           stand-alone derivative financial instrument, and the combined
           contract is not designated or classified as HFT. These embedded
           derivatives are accounted for as other HFT financial assets and
           liabilities.

           As a result of this new accounting standard for embedded
           derivatives, the Company now accounts for the redemption options
           embedded in some perpetual preferred shares separately from the
           host instrument. This has no significant impact on the Company's
           consolidated statement of income.

           Comprehensive income
           --------------------
           The consolidated statement of comprehensive income is a new
           financial statement. This new statement reflects the net income as
           adjusted, net of income taxes, for the AFS asset changes in fair
           values during the period less the amount recognized in the
           consolidated statement of income during the period. Such an
           adjustment is called OCI and is not included in the earnings per
           share calculations.

           Accumulated other comprehensive income
           --------------------------------------
           The accumulated OCI ("AOCI") is a new component of the
           shareholders' equity and represents the accumulated changes in
           fair values, net of income taxes, of AFS assets that are not yet
           recognized in the consolidated statement of income.

           Revenue and expenses recognition
           --------------------------------
           Under previous standards, transaction costs were capitalized on
           initial recognition. Under the new standards, the transaction
           costs are now expensed as incurred for financial instruments
           classified or designated as HFT. For other financial instruments,
           transaction costs are still capitalized on initial recognition.

           The effective interest method of amortization is used for any
           transaction cost capitalized on initial recognition and for the
           premiums or discounts earned or incurred for loans and AFS
           securities.

           Determination of fair value
           ---------------------------
           The fair value of a financial instrument on initial recognition is
           normally the transaction price, i.e. the fair value of the
           consideration given or received.

           Subsequent to initial recognition, the fair values are determined
           based on available information. When a quoted active market
           exists, the fair values of financial assets are based on bid
           prices and the fair values of financial liabilities, namely short
           securities and some derivative financial instruments, are based on
           ask prices. When independent prices are not available, the fair
           values of securities HFT are determined by using valuation
           techniques commonly used by market participants, which refer to
           observable market data, and AFS assets are then carried at
           amortized cost. Valuation techniques commonly used by market
           participants includes as well comparisons with similar instruments
           where market observable prices exist, discounted cash flow
           analysis and option pricing models.

           If the fair value of a financial asset measured at fair value
           becomes negative, it is recorded as a financial liability until
           its fair value becomes positive at which time it is recorded as a
           financial asset, or it is extinguished. These changes in
           classifications occur mainly to derivative financial instruments
           (see current classification in the consolidated balance sheet of
           derivative financial instruments in table 3.3). Derivative
           financial instruments with positive fair values are recorded as
           other receivables and those with negative fair values are recorded
           as other liabilities.

        b) Other changes in accounting policies

           Effective January 1, 2007, the Company applied the revised
           provisions of the CICA handbook section 1506 "Accounting changes".
           Accordingly, voluntary changes in accounting policies are made
           only if they result in reliable and more relevant information. No
           voluntary changes were made in 2007.

           The Company also applied the Emerging Issues Committee ("EIC")
           Abstract No. 163 "Determining the Variability to be Considered in
           Applying AcG-15". This EIC provides additional clarification on
           how to analyze and consolidate variable interest entities. The
           impact was not significant on the Company's consolidated financial
           statements.

        c) Future accounting changes not yet applied

           The CICA issued a new accounting standard, section 1535 "Capital
           Disclosures", which requires the disclosure of both qualitative
           and quantitative information that enables users of financial
           statements to evaluate the entity's objectives, policies and
           processes for managing capital. This new standard is effective for
           the Company beginning January 1, 2008.

           Effective January 1, 2008, the Company will also apply the new
           CICA handbook sections 3862 "Financial Instruments - Disclosure"
           and 3863 "Financial Instruments - Presentation" revising and
           enhancing actual disclosure requirements. The new sections place
           increased emphasis on disclosures about the nature and extent of
           risks arising from financial instruments and how the entity
           manages those risks.

        d) Comparative figures

           The Company reclassified to goodwill certain deferred acquisition
           costs, net of income taxes. The reclassification had no
           significant impact on the consolidated statement of income.

           Certain other comparative figures have been reclassified to
           conform to the presentation adopted in the current period.

        3. Invested assets and other financial instruments

        a) Invested assets by designation

        Table 3.1
        ---------------------------------------------------------------------
                                  Classified Designated
        At June 30, 2007  AFS       as HFT     as HFT     Loans      Total
        ---------------------------------------------------------------------
        Debt securities
          Short-term
           notes           2,972          -          -          -      2,972
          Fixed income
           securities  1,962,700          -  1,541,247          -  3,503,947
        Equity
         securities
          Preferred
           shares      1,578,707          -          -          -  1,578,707
          Common
           shares      1,428,608     80,427    224,516          -  1,733,551
        Loans and
         equity
         investments      13,487          -          -    226,872    240,359
        ---------------------------------------------------------------------
                       4,986,474     80,427  1,765,763    226,872  7,059,536
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Fixed income securities totaling $68,621 (December 2006 - carrying
        value of $60,878, fair value of $60,896) are pledged as collateral
        for short securities of $69,473 (December 2006 - carrying value of
        $57,093, fair value of $62,289).

        b) Unrecognized gains and losses

        Table 3.2
        ---------------------------------------------------------------------
                                 Unamortized      Unrealized
        At June 30, 2007             cost      Gains      Losses   Fair value
        ---------------------------------------------------------------------
        Debt securities           3,531,246      6,367     30,694  3,506,919
        Equity securities         3,279,921    130,845     98,508  3,312,258
        Loans and equity
         investments                240,359        583        296    240,646
        ---------------------------------------------------------------------
                                  7,051,526    137,795    129,498  7,059,823
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        ---------------------------------------------------------------------
                                                  Unrealized
        At December 31, 2006      Book value   Gains      Losses   Fair value
        ---------------------------------------------------------------------
        Debt securities           3,972,243     30,639      7,772  3,995,110
        Equity securities         3,040,848    238,296     61,574  3,217,570
        Loans and equity
         investments                228,847      1,738          -    230,585
        ---------------------------------------------------------------------
                                  7,241,938    270,673     69,346  7,443,265
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        c) Positive and negative fair values of derivative financial
           instruments

        Table 3.3
        ---------------------------------------------------------------------
                                                             Fair values
        At June 30, 2007                                 Positive   Negative
        ---------------------------------------------------------------------
        Designated as fair value hedge                      3,385          -
        Not designated in a hedging relationship           18,791      6,586
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
                                                             Fair values
        At December 31, 2006                             Positive   Negative
        ---------------------------------------------------------------------
        Designated as fair value hedge                          -        824
        Not designated in a hedging relationship            1,585      3,522
        ---------------------------------------------------------------------

        4. Claims liabilities

        The table 4.1 presents direct claims liabilities movements.

        Table 4.1
        ---------------------------------------------------------------------
                                  For the three months   For the six months
                                      ended June 30         ended June 30
        ---------------------------------------------------------------------
                                     2007       2006       2007       2006
        ---------------------------------------------------------------------
        Claims liabilities,
         beginning of period      3,877,170  3,788,539  3,823,539  3,821,609
        Transition adjustment
         (note 2)                         -          -     17,960          -
        Claims incurred             639,764    539,990  1,279,606  1,141,026
        Prior year favorable
         claims development         (45,878)   (43,290)   (58,403)   (83,246)
        Claims paid                (592,312)  (530,138)(1,183,958)(1,124,288)
        ---------------------------------------------------------------------
        Claims liabilities,
         end of period            3,878,744  3,755,101  3,878,744  3,755,101
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        5. Share capital

        The Company completed a substantial issuer bid under which it
        purchased for cancellation, on March 30, 2007, 9,259,239 of its
        common shares at $54.00 per share for a total consideration of
        $500,000 plus fees of $1,144, net of income taxes. Total cost paid,
        including fees, was first charged to share capital to the extent of
        the average carrying value of the common shares purchased for
        cancellation and the excess was charged to retained earnings.

        a) Issued and outstanding

        Table 5.1
        ---------------------------------------------------------------------
                                                  At June 30, 2007
        ---------------------------------------------------------------------
                                                     Issued and
                                        Authorized  outstanding
                                         (shares)     (shares)      Amount
        ---------------------------------------------------------------------
        Common                           Unlimited  124,472,761    1,101,881
        Class A                          Unlimited            -            -
        Special                                One            1            -
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
                                                 At December 31, 2006
        ---------------------------------------------------------------------
                                                     Issued and
                                        Authorized  outstanding
                                         (shares)    (shares)       Amount
        ---------------------------------------------------------------------
        Common                           Unlimited  133,732,000    1,183,846
        Class A                          Unlimited            -            -
        Special                                One            1            -
        ---------------------------------------------------------------------

        b) Stock-based compensation

        Table 5.2
        ---------------------------------------------------------------------
                                  For the three months   For the six months
                                       ended June 30        ended June 30
        ---------------------------------------------------------------------
        Awarded or change in
         estimate of:                2007       2006       2007       2006
        ---------------------------------------------------------------------
        Long-term incentive plan
         (units)                    (39,119)     4,708    162,126    181,574
        Employee share purchase
         plan (restricted shares)    14,514          -     28,804          -
        ---------------------------------------------------------------------

        Table 5.3
        ---------------------------------------------------------------------
        Outstanding:                                        At         At
                                                         June 30,   June 30,
                                                           2007       2006
        ---------------------------------------------------------------------
        Long-term incentive plan (units)                  707,400    545,274
        Employee share purchase plan (restricted shares)   51,696          -
        ---------------------------------------------------------------------

        6. Related party transactions

        a) Revenues and expenses

        Table 6.1
        ---------------------------------------------------------------------
                                  For the three months   For the six months
                                      ended June 30         ended June 30
        ---------------------------------------------------------------------
                                     2007       2006       2007       2006
        ---------------------------------------------------------------------
        Reinsurance ceded to
         related entities
        Ceded premiums earned         5,269      3,211     10,262      8,118
        Ceded claims expenses          (450)     2,336        761      2,790
        Expenses
        Commissions                   9,158      7,931     17,552     15,157
        General expenses              4,519      4,365      9,029      8,753
        Interest                          -      1,990          -      3,981
        ---------------------------------------------------------------------

        b) Consolidated balance sheet amounts

        Table 6.2
        ---------------------------------------------------------------------
                                                            At         At
                                                         June 30  December 31
                                                           2007       2006
        ---------------------------------------------------------------------
        Reinsurance receivable                              1,568      4,252
        Broker loans                                       70,440     62,985
        ---------------------------------------------------------------------

        7. Additional information

        The table 7.1 presents additional information on consolidated
        statements of income and cash flows.

        Table 7.1
        ---------------------------------------------------------------------
                                   For the three months   For the six months
                                      ended June 30         ended June 30
        ---------------------------------------------------------------------
                                     2007       2006       2007       2006
        ---------------------------------------------------------------------
        Consolidated statement of income

        Income from HFT financial
         instruments
          Interest                   18,263          -     40,200          -
          Dividends                   3,138          -      6,215          -
          Realized gains                317          -      1,813          -
          Unrealized gains          (34,827)         -    (34,038)         -
          Derivative financial
           instruments                8,351          -      6,478          -
                                   ------------------------------------------
                                     (4,758)         -     20,668          -
        Impairments                  (1,308)    (6,745)   (13,897)    (9,609)
        Amortization                 (4,500)    (4,247)    (4,618)    (7,534)
        Stock-based compensation     (1,409)      (970)    (3,206)    (1,910)
        Employee future benefits     (3,294)      (647)    (3,608)    (1,205)
        Consolidated statement of
         cash flows
        Income taxes paid           (43,055)   (71,127)  (139,592)  (180,352)
        Interest paid                     -          -          -     (3,981)
        ---------------------------------------------------------------------

        8. Segmented information

        The Company has two reportable segments, the underwriting segment and
        the corporate and distribution segment.

        The Company's core business activity is P&C insurance underwriting.
        Underwriting segment includes two lines of business: personal lines
        and commercial lines. Classes in personal lines include automobile
        and property. Classes in commercial lines encompass primarily
        automobile and other, primarily property and liability.

        Corporate and distribution segment includes the results of the
        Company's broker operations and the results of other operations.

        a) Results of the Company's reportable segments and their assets

        Table 8.1
        ---------------------------------------------------------------------
                                             Corporate    Inter-
                                                and      segment
        For the three months ended           distribu-   elimina-
         June 30, 2007           Underwriting   tion      tions      Total
        ---------------------------------------------------------------------
        Revenues                    976,659     50,928   (20,881)  1,006,706
        Expenses                    884,372     23,478   (11,401)    896,449
                                 --------------------------------------------
        Subtotal                     92,287     27,450    (9,480)    110,257
        Interest and dividend
         income                                                       91,952
        Invested assets management
         expenses                                                     (4,992)
        Net gains on invested
         assets and other gains                                       53,600
        ---------------------------------------------------------------------
        Total income before income taxes                             250,817
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        ---------------------------------------------------------------------
                                             Corporate    Inter-
                                                and      segment
        For the six months ended             distribu-   elimina-
         June 30, 2007           Underwriting   tion      tions      Total
        ---------------------------------------------------------------------
        Revenues                  1,933,328     89,670   (34,187)  1,988,811
        Expenses                  1,800,703     43,931   (24,707)  1,819,927
                                 --------------------------------------------
        Subtotal                    132,625     45,739    (9,480)    168,884
        Interest and dividend
         income                                                      183,450
        Invested assets management
         expenses                                                     (9,776)
        Net gains on invested
         assets and other gains                                       79,679
        ---------------------------------------------------------------------
        Total income before
         income taxes                                                422,237
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        As at June 30, 2007

        Goodwill                     74,411     86,387         -     160,798
        Invested assets           6,538,618    532,939   (12,021)  7,059,536
        Other                     2,852,511    255,191    (9,848)  3,097,854
        ---------------------------------------------------------------------
        Total assets              9,465,540    874,517   (21,869) 10,318,188
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        ---------------------------------------------------------------------
                                             Corporate    Inter-
                                                and      segment
        For the three months ended            distribu-  elimina-
         June 30, 2006           Underwriting   tion      tions      Total
        ---------------------------------------------------------------------
        Revenues                    955,704     32,030   (13,277)    974,457
        Expenses                    790,059     18,244   (13,277)    795,026
                                 --------------------------------------------
        Subtotal                    165,645     13,786         -     179,431
        Interest and
         dividend income                                              87,311
        Invested assets
         management
         expenses                                                     (5,843)
        Net gains on
         invested assets
         and other gains                                              34,785
        ---------------------------------------------------------------------
        Total income before income taxes                             295,684
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


        ---------------------------------------------------------------------
                                             Corporate    Inter-
                                                and      segment
        For the six months ended             distribu-   elimina-
         June 30, 2006           Underwriting   tion      tions      Total
        ---------------------------------------------------------------------
        Revenues                  1,892,592     53,112   (24,072)  1,921,632
        Expenses                  1,647,008     31,654   (24,072)  1,654,590
                                 --------------------------------------------
        Subtotal                    245,584     21,458         -     267,042
        Interest and dividend
         income                                                      166,295
        Invested assets
         management expenses                                         (11,686)
        Net gains on invested assets and other gains                 142,462
        ---------------------------------------------------------------------
        Total income before income taxes                             564,113
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        As at June 30, 2006
        Goodwill                     74,411     67,848         -     142,259
        Invested assets           6,359,676    670,263         -   7,029,939
        Other                     2,617,158    391,502   (15,185)  2,993,475
        ---------------------------------------------------------------------
        Total assets              9,051,245  1,129,613   (15,185) 10,165,673
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        b) Results by line of business

        Table 8.2
        ---------------------------------------------------------------------
                                   For the three months   For the six months
                                      ended June 30         ended June 30
        ---------------------------------------------------------------------
                                     2007       2006       2007       2006
        ---------------------------------------------------------------------
        Direct premiums written
        Personal                    874,864    835,133  1,471,961  1,385,477
        Commercial                  330,282    341,003    587,190    603,172
        Underwriting income
        Personal                     49,949    101,442     86,987    141,428
        Commercial                   42,338     64,203     45,638    104,156
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
    





For further information:

For further information: Media enquiries: Gilles Gratton, Vice President
- Corporate Communications, (416) 217-7206, Email:
gilles.gratton@ingcanada.com; Investor enquiries: Michelle Dodokin, Vice
President - Investor Relations, (416) 344-8044, Email:
michelle.dodokin@ingcanada.com


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