Ameriprise 2014 Annual Report Download - page 89

Protection
Our Protection segment offers a variety of products to address the protection and risk management needs of our retail
clients including life, DI and property casualty insurance. Life and DI 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 and property casualty subsidiaries. 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,
2014 2013 Change
(in millions)
Revenues
Management and financial advice fees $ 59 $ 58 $ 1 2%
Distribution fees 92 91 1 1
Net investment income 447 439 8 2
Premiums 1,292 1,188 104 9
Other revenues 397 410 (13) (3)
Total revenues 2,287 2,186 101 5
Banking and deposit interest expense — — — —
Total net revenues 2,287 2,186 101 5
Expenses
Distribution expenses 61 62 (1) (2)
Interest credited to fixed accounts 153 145 8 6
Benefits, claims, losses and settlement expenses 1,416 1,252 164 13
Amortization of deferred acquisition costs 135 118 17 14
Interest and debt expense 28 25 3 12
General and administrative expense 248 248 — —
Total expenses 2,041 1,850 191 10
Operating earnings $ 246 $ 336 $ (90) (27)%
Our Protection segment pretax operating income, which excludes net realized gains or losses and the market impact on
indexed universal life benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the
reinsurance accrual), decreased $90 million, or 27%, to $246 million for the year ended December 31, 2014 compared
to $336 million for the prior year primarily due to lower auto and home earnings reflecting higher incurred losses, as well
as the impact of unlocking.
Net Revenues
Net revenues, which exclude net realized gains or losses and the unearned revenue amortization and the reinsurance
accrual offset to the market impact on indexed universal life benefits, increased $101 million, or 5%, to $2.3 billion for
the year ended December 31, 2014 compared to $2.2 billion for the prior year primarily due to growth in auto and home
premiums partially offset by the impact of unlocking.
Premiums increased $104 million, or 9%, to $1.3 billion for the year ended December 31, 2014 compared to $1.2 billion
for the prior year primarily due to growth in auto and home premiums driven by continued new policy sales growth,
primarily from our affinity relationships with Costco and Progressive. Auto and home policies in force increased 11%
compared to the prior year.
Other revenues decreased $13 million, or 3%, to $397 million for the year ended December 31, 2014 compared to
$410 million for the prior year primarily due to a $29 million unfavorable impact from unlocking for the year ended
December 31, 2014 compared to an $18 million unfavorable impact in the prior year. The primary driver of the unlocking
impact to other revenues in both periods was lower projected gains on reinsurance contracts resulting from favorable
mortality experience.
70