Ameriprise 2012 Annual Report Download - page 105

• the Company’s capital structure, including indebtedness, limitations on subsidiaries to pay dividends, and the extent,
manner, terms and timing of any share or debt repurchases management may effect as well as the opinions of rating
agencies and other analysts and the reactions of market participants or the Company’s regulators, advisors,
distribution partners or customers in response to any change or prospect of change in any such opinion;
• changes to the availability and cost of liquidity and the Company’s credit capacity that may arise due to shifts in
market conditions, the Company’s credit ratings and the overall availability of credit;
• risks of default, capacity constraint or repricing by issuers or guarantors of investments the Company owns or by
counterparties to hedge, derivative, insurance or reinsurance arrangements or by manufacturers of products the
Company distributes, experience deviations from the Company’s assumptions regarding such risks, the evaluations or
the prospect of changes in evaluations of any such third parties published by rating agencies or other analysts, and the
reactions of other market participants or the Company’s regulators, advisors, distribution partners or customers in
response to any such evaluation or prospect of changes in evaluation;
• experience deviations from the Company’s assumptions regarding morbidity, mortality and persistency in certain annuity
and insurance products, or from assumptions regarding market returns assumed in valuing or unlocking DAC and DSIC
or market volatility underlying the Company’s valuation and hedging of guaranteed living benefit annuity riders; or from
assumptions regarding anticipated claims and losses relating to the Company’s automobile and home insurance
products;
• changes in capital requirements that may be indicated, required or advised by regulators or rating agencies;
• the impacts of the Company’s efforts to improve distribution economics and to grow third-party distribution of its
products;
• the Company’s ability to pursue and complete strategic transactions and initiatives, including acquisitions, divestitures,
restructurings, joint ventures and the development of new products and services;
• the Company’s ability to realize the financial, operating and business fundamental benefits or to obtain regulatory
approvals regarding integrations we plan for the acquisitions we have completed or may pursue and contract to
complete in the future, as well as the amount and timing of integration expenses;
• the ability and timing to realize savings and other benefits from re-engineering and tax planning;
• interruptions or other failures in the Company’s communications, technology and other operating systems, including
errors or failures caused by third party service providers, interference or failures caused by third party attacks on the
Company’s systems, or the failure to safeguard the privacy or confidentiality of sensitive information and data on such
systems; and
• general economic and political factors, including consumer confidence in the economy and the financial industry, the
ability and inclination of consumers generally to invest as well as their ability and inclination to invest in financial
instruments and products other than cash and cash equivalents, the costs of products and services the Company
consumes in the conduct of its business, and applicable legislation and regulation and changes therein, including tax
laws, tax treaties, fiscal and central government treasury policy, and policies regarding the financial services industry
and publicly-held firms, and regulatory rulings and pronouncements.
Management cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that
management is unable to predict at this time that may cause actual results to differ materially from those in forward-
looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of the date on which they are made. Management undertakes no obligation to update publicly or revise any
forward-looking statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
Our primary market risk exposures are interest rate, equity price, foreign currency exchange rate and credit risk. Equity
price and interest rate fluctuations can have a significant impact on our results of operations, primarily due to the effects
they have on the asset management and other asset-based fees we earn, the spread income generated on our annuities,
brokerage client cash balances and face amount certificate products and UL insurance products, the value of DAC and
DSIC assets, the value of liabilities for guaranteed benefits associated with our variable annuities and the value of
derivatives held to hedge these benefits.
The guaranteed benefits associated with our variable annuities are GMWB, guaranteed minimum accumulation benefits
(‘‘GMAB’’), guaranteed minimum death benefits (‘‘GMDB’’) and guaranteed minimum income benefits (‘‘GMIB’’). Each of
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