Ameriprise 2011 Annual Report Download - page 96

Premiums increased $46 million, or 44%, to $150 million for the year ended December 31, 2010 compared to
$104 million for the prior year due to higher sales of immediate annuities with life contingencies.
Other revenues increased $49 million, or 32%, to $202 million for the year ended December 31, 2010 compared to
$153 million for the prior year due to higher fees from variable annuity guarantees.
Expenses
Total expenses increased $235 million, or 15%, to $1.9 billion for the year ended December 31, 2010 compared to
$1.6 billion for the prior year. Operating expenses, which exclude the market impact on variable annuity guaranteed living
benefits, net of hedges, DSIC and DAC amortization, increased $271 million, or 17%, to $1.8 billion for the year ended
December 31, 2010 compared to $1.6 billion for the prior year primarily due to increases in distribution expenses and
benefits, claims, losses and settlement expenses partially offset by a decrease in amortization of DAC.
Distribution expenses increased $57 million, or 27%, to $268 million for the year ended December 31, 2010 compared
to $211 million for the prior year primarily due to higher variable annuity compensation.
Interest credited to fixed accounts increased $3 million to $762 million for the year ended December 31, 2010 compared
to $759 million for the prior year due to higher average fixed annuity account balances partially offset by a lower average
crediting rate on interest sensitive fixed annuities. Average fixed annuities contract accumulation values increased
$600 million, or 4%, to $14.5 billion for 2010 compared to the prior year. The average fixed annuity crediting rate
excluding capitalized interest decreased to 3.8% in 2010 compared to 3.9% in the prior year.
Benefits, claims, losses and settlement expenses increased $273 million, or 65%, to $691 million for the year ended
December 31, 2010 compared to $418 million for the prior year. Operating benefits, claims, losses and settlement
expenses, which exclude the market impact on variable annuity guaranteed living benefits, net of hedges and DSIC
amortization, increased $418 million to $682 million for the year ended December 31, 2010 compared to $264 million
for the prior year primarily driven by the impact of updating valuation assumptions and model changes. Operating benefits,
claims, losses and settlement expenses in 2010 included an expense of $256 million from updating valuation
assumptions and model changes compared to a benefit of $57 million in the prior year. The market impact to DSIC was a
benefit of $3 million in 2010 compared to a benefit of $4 million in the prior year. Benefits, claims, losses and settlement
expenses related to our immediate annuities with life contingencies increased compared to the prior year primarily due to
higher premiums. In addition, benefits, claims, losses and settlement expenses increased as a result of the
implementation of changes to the Portfolio Navigator program in the second quarter of 2010.
Amortization of DAC decreased $113 million to a benefit of $76 million for the year ended December 31, 2010 compared
to an expense of $37 million in the prior year. Operating amortization of DAC, which excludes the DAC offset to the market
impact on variable annuity guaranteed living benefits, decreased $222 million to a benefit of $92 million for the year
ended December 31, 2010 compared to an expense of $130 million for the prior year primarily due to the impact of
updating valuation assumptions and model changes. Operating amortization of DAC in 2010 included a benefit of
$353 million from updating valuation assumptions and model changes compared to a benefit of $61 million in the prior
year. The market impact on DAC amortization in 2010 was a benefit of $21 million compared to a benefit of $23 million
in the prior year. An increase in DAC amortization related to higher variable annuity gross profits was partially offset by a
decrease as a result of the implementation of changes to the Portfolio Navigator program in the second quarter of 2010.
General and administrative expense increased $13 million, or 7%, to $205 million for the year ended December 31, 2010
compared to $192 million for the prior year primarily driven by additional expenses related to new product introductions
and enhancements.
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