Ameriprise 2014 Annual Report Download - page 101

Other revenues increased $58 million, or 19%, to $367 million for the year ended December 31, 2013 compared to
$309 million for the prior year due to higher fees from variable annuity guarantees driven by higher volumes due to prior
year sales with a first fee collected on the anniversary date, as well as higher fee rates.
Expenses
Total expenses, which exclude the market impact on variable annuity guaranteed benefits (net of hedges and the related
DSIC and DAC amortization) decreased $57 million, or 3%, to $1.9 billion for the year ended December 31, 2013
compared to $2.0 billion for the prior year primarily due to the impact of unlocking.
Distribution expenses increased $39 million, or 10%, to $420 million for the year ended December 31, 2013 compared
to $381 million for the prior year primarily due to higher variable annuity compensation driven by higher variable annuity
contract values due to market appreciation.
Interest credited to fixed accounts decreased $35 million, or 5%, to $653 million for the year ended December 31, 2013
compared to $688 million for the prior year driven by lower average fixed annuity account balances. Average fixed
annuities contract accumulation values decreased $508 million, or 4%, to $13.5 billion for the year ended December 31,
2013 compared to the prior year due to net outflows.
Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity guaranteed
benefits (net of hedges and the related DSIC amortization), increased $79 million, or 19%, to $498 million for the year
ended December 31, 2013 compared to $419 million for the prior year primarily due to the impact of unlocking and an
increase in expenses of approximately $40 million related to higher reserve funding driven by the impact of higher fees
from prior year sales with variable annuity guarantees, partially offset by a $31 million benefit from policyholder movement
of investments in Portfolio Navigator funds under certain in-force variable annuities with living benefit guarantees to the
Portfolio Stabilizer funds. Benefits, claims, losses and settlement expenses for the year ended December 31, 2013
included a $21 million expense from unlocking primarily reflecting the impact of variable annuity model changes. Benefits,
claims, losses and settlement expenses for the prior year included a $32 million benefit from unlocking primarily reflecting
a $53 million benefit from an adjustment to the model which values the reserves related to living benefit guarantees
primarily attributable to prior periods, partially offset by lower bond fund returns related to the life contingent benefits
associated with GMWB.
Amortization of DAC, which excludes the DAC offset to the market impact on variable annuity guaranteed benefits (net of
hedges and the related DSIC amortization), decreased $118 million, or 52%, to $111 million for the year ended
December 31, 2013 compared to $229 million for the prior year primarily due to the impact of unlocking. Amortization of
DAC for the year ended December 31, 2013 included an $81 million benefit from unlocking primarily driven by the impact
of expected higher interest rates and changes in assumed policyholder behavior. Amortization of DAC for the prior year
included a $41 million expense from unlocking primarily reflecting spread compression and lower bond fund growth rates,
partially offset by a benefit from improved persistency and lowered mortality assumption. The impact of unlocking for 2012
included a $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.
General and administrative expense decreased $25 million, or 11%, to $213 million for the year ended December 31,
2013 compared to $238 million for the prior year primarily due to decreases in investment spending, advertising costs,
service delivery charges and professional services fees. In addition, we recognized a net $6 million charge in the prior year
for estimated future assessments from state insurance guaranty funds, primarily associated with the liquidation of
Executive Life Insurance Company of New York.
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