Ameriprise 2008 Annual Report Download - page 13
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We live by the same advice our advisors provide to clients—
we take a prudent approach with a long-term focus. It is a
mindset that guides our decision-making and helps ensure
we can serve our clients and advisors well through market
cycles.
Like a majority of the companies in the financial services
industry, our investment portfolio suffered losses from
the broad dislocation in financial markets in 2008. These
losses compared favorably to the average of our peer
group. Our portfolio is high quality and diversified across
asset classes, industries and issuers. We invest where
we see opportunity— targeting an appropriate return with
manageable risk, which helps ensure we meet our financial
commitments over time.
Our risk management framework guides our capital and
liquidity decisions and is integrated within our product
design, features and pricing. It also extends to our variable
annuity living benefit hedging, which performed well in one
of the most volatile periods in history.
Our revenues and profits are influenced by equity and credit
markets—both in terms of asset levels and client activity.
To help offset market-driven declines, we reduced our con-
trollable expenses and surpassed our annual $175 million
re-engineering goal. We have accelerated our re-engineering
efforts in 2009, and we will bring a significant portion of
these savings to the bottom line. We remain steadfast in
ensuring our expenses align to our revenue opportunity,
even as we continue to enhance our client service.
As market and economic conditions deteriorated in 2008, we
significantly expanded the information we provided investors.
We know that trust must be earned continually, and we are
committed to transparency in our financial disclosures.
General and Administrative Expenses
(In billions)
2005
2006
2007
2008
$2.3
$2.5
$2.6
$2.4
Asset Portfolio by Rating
(Fair value at 12/31/08
was $34 billion)
Cash and cash equivalents
18%
U.S. Gov’t & Agency-backed
18%
Investment grade
47%
Below investment grade
5%
Direct loans/non-rated
12%
Ameriprise Financial 2008 Annual Report 11