Ameriprise 2013 Annual Report Download - page 99

Protection
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 1,146 1,134 12 1
Amortization of deferred acquisition costs 110 119 (9) (8)
General and administrative expense 224 226 (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.
Expenses
Total expenses increased $7 million to $1.7 billion for the year ended December 31, 2012 compared to the prior year.
Benefits, claims, losses and settlement expenses increased $12 million, or 1%, to $1.1 billion for the year ended
December 31, 2012 compared to the prior year due to higher expenses related to our auto and home business, partially
offset by a $14 million benefit from unlocking and model changes in 2012 primarily due to favorable mortality experience
compared to a $4 million benefit in the prior year, as well as a $9 million benefit from a life insurance reserve release in
2012. Benefits, claims, losses and settlement expenses related to our auto and home business increased $28 million
compared to the prior year primarily driven by increased claim and claim adjustment expense reflecting the increase in net
unfavorable prior year reserve development, higher catastrophe losses and growth in exposures due to a 16% increase in
gross new policies. Auto and home catastrophe losses in 2012 were $51 million, including $20 million from Superstorm
Sandy, compared to $45 million in 2011.
Amortization of DAC decreased $9 million, or 8%, to $110 million for the year ended December 31, 2012 compared to
$119 million for the prior year due to a $14 million benefit from unlocking and model changes in 2012 primarily due to
lowered mortality assumption compared to a $1 million benefit in the prior year.
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