Ameriprise 2012 Annual Report Download - page 96

Protection
The following table presents the results of operations of our Protection segment on an operating basis:
Years Ended
December 31,
2011 2010 Change
(in millions)
Revenues
Management and financial advice fees $ 56 $ 54 $ 2 4%
Distribution fees 95 96 (1) (1)
Net investment income 426 428 (2) —
Premiums 1,076 1,047 29 3
Other revenues 417 422 (5) (1)
Total revenues 2,070 2,047 23 1
Banking and deposit interest expense 1 1 — —
Total net revenues 2,069 2,046 23 1
Expenses
Distribution expenses 62 68 (6) (9)
Interest credited to fixed accounts 142 147 (5) (3)
Benefits, claims, losses and settlement expenses 1,085 1,059 26 2
Amortization of deferred acquisition costs 119 110 9 8
General and administrative expense 275 253 22 9
Total expenses 1,683 1,637 46 3
Operating earnings $ 386 $ 409 $ (23) (6)%
Our Protection segment pretax operating income, which excludes net realized gains or losses, decreased $23 million, or
6%, to $386 million for the year ended December 31, 2011, compared to $409 million for the prior year primarily due to
higher claims and general and administrative expenses partially offset by higher premiums.
Net Revenues
Net revenues, which exclude net realized gains or losses, increased $23 million, or 1%, to $2.1 billion for the year ended
December 31, 2011 compared to $2.0 billion for the prior year due to auto and home premium growth.
Premiums increased $29 million, or 3%, to $1.1 billion for the year ended December 31, 2011 compared to $1.0 billion
for the prior year due to growth in auto and home premiums driven by higher volumes. Auto and home policy counts
increased 7% period-over-period.
Expenses
Total expenses increased $46 million, or 3%, to $1.7 billion for the year ended December 31, 2011 compared to
$1.6 billion for the prior year due to increases in benefits, claims, losses and settlement expenses, amortization of DAC
and general and administrative expense.
Benefits, claims, losses and settlement expenses increased $26 million, or 2%, to $1.1 billion for the year ended
December 31, 2011 compared to the prior year. Benefits, claims, losses and settlement expenses related to our auto and
home business increased from the prior year primarily due to premium growth, a $16 million increase in catastrophe
losses and higher auto liability reserves. In addition, benefits, claims, losses and settlement expenses increased as a result
of higher UL claims and an increase in ongoing reserve levels for UL products with secondary guarantees compared to the
prior year. Benefits, claims, losses and settlement expenses in 2011 included a benefit of $4 million from unlocking and
model changes compared to an expense of $44 million in the prior year.
Amortization of DAC increased $9 million, or 8%, to $119 million for the year ended December 31, 2011 compared to
$110 million for the prior year. Amortization of DAC in 2011 included a benefit of $1 million from unlocking and model
changes compared to a benefit of $12 million in the prior year. Amortization of DAC in 2010 included a benefit of
$3 million as a result of the implementation of changes to the Portfolio Navigator program. The market impact on
amortization of DAC was an expense of $1 million in 2011 compared to a benefit of $4 million in the prior year as a result
of unfavorable equity markets in 2011 compared to improving equity markets in 2010, which was partially offset by a
decrease in DAC amortization as a result of better persistency and lower current period profits due to higher direct claims.
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