Ameriprise 2012 Annual Report Download - page 83

$10 million expense for the DAC offset to the adjustment to the model which values the reserves related to living benefit
guarantees primarily attributable to prior periods. Amortization of DAC in 2011 included a $39 million expense from
unlocking and model changes primarily driven by spread compression, partially offset by a benefit from improved
policyholder persistency.
Protection
Our Protection segment offers a variety of products to address the protection and risk management needs of our retail
clients including life, disability income and property-casualty insurance. Life and disability income products are primarily
provided through our advisors. Our property-casualty products are sold primarily through affinity relationships. We issue
insurance policies through our life insurance subsidiaries and the Property Casualty companies. The primary sources of
revenues for this segment are premiums, fees and charges we receive to assume insurance-related risk. We earn net
investment income on owned assets supporting insurance reserves and capital supporting the business. We also receive
fees based on the level of assets supporting VUL separate account balances. This segment earns intersegment revenues
from fees paid by our Asset Management segment for marketing support and other services provided in connection with
the availability of VIT Funds under the VUL contracts. Intersegment expenses for this segment include distribution expenses
for services provided by our Advice & Wealth Management segment, as well as expenses for investment management
services provided by our Asset Management segment.
The following table presents the results of operations of our Protection segment on an operating basis:
Years Ended
December 31,
2012 2011 Change
(in millions)
Revenues
Management and financial advice fees $ 55 $ 56 $ (1) (2)%
Distribution fees 91 95 (4) (4)
Net investment income 430 426 4 1
Premiums 1,121 1,076 45 4
Other revenues 392 417 (25) (6)
Total revenues 2,089 2,070 19 1
Banking and deposit interest expense 1 1 — —
Total net revenues 2,088 2,069 19 1
Expenses
Distribution expenses 67 62 5 8
Interest credited to fixed accounts 143 142 1 1
Benefits, claims, losses and settlement expenses 1,093 1,085 8 1
Amortization of deferred acquisition costs 110 119 (9) (8)
General and administrative expense 277 275 2 1
Total expenses 1,690 1,683 7 —
Operating earnings $ 398 $ 386 $ 12 3%
Our Protection segment pretax operating income, which excludes net realized gains or losses, increased $12 million, or
3%, to $398 million for the year ended December 31, 2012, compared to $386 million for the prior year driven by higher
auto and home earnings.
Net Revenues
Net revenues, which exclude net realized gains or losses, increased $19 million, or 1%, to $2.1 billion for the year ended
December 31, 2012 compared to the prior year due to growth in auto and home premiums, partially offset by the impact
of unlocking.
Premiums increased $45 million, or 4%, to $1.1 billion for the year ended December 31, 2012 compared to the prior
year due to growth in auto and home premiums driven by higher volumes. Auto and home policy counts increased 9%
year-over-year.
Other revenues decreased $25 million, or 6%, to $392 million for the year ended December 31, 2012 compared to
$417 million for the prior year due to a $41 million unfavorable impact from unlocking in 2012 compared to a $20 million
unfavorable impact in the prior year. The primary driver of the unlocking impact to other revenues in both years was lower
projected gains on reinsurance contracts resulting from favorable mortality experience.
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