Ameriprise 2015 Annual Report Download - page 99

Net investment income, which excludes net realized investment gains or losses, decreased $95 million, or 9%, to
$941 million for the year ended December 31, 2014 compared to $1.0 billion for the prior year primarily reflecting a
decrease of approximately $39 million from lower invested assets due to fixed annuity net outflows and approximately
$63 million from lower interest rates.
Other revenues increased $58 million, or 16%, to $425 million for the year ended December 31, 2014 compared to
$367 million for the prior year due to higher fees from variable annuity guarantee sales in the prior year where the fees
start on the first anniversary date and higher average 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) and the DAC and DSIC offset to net realized investment gains or losses, increased
$26 million, or 1%, to $2.0 billion for the year ended December 31, 2014 compared to $1.9 billion for the prior year
primarily due to an increase in amortization of DAC, partially offset by a decrease in interest credited to fixed accounts and
benefits, claims, losses and settlement expenses.
Distribution expenses increased $19 million, or 5%, to $439 million for the year ended December 31, 2014 compared to
$420 million for the prior year primarily due to higher variable annuity compensation driven by higher variable annuity
contract values.
Interest credited to fixed accounts decreased $97 million, or 15%, to $556 million for the year ended December 31,
2014 compared to $653 million for the prior year driven by lower average fixed annuity account balances and a lower
average crediting rate on interest sensitive fixed annuities. Average fixed annuity account balances decreased $884 million,
or 7%, to $12.7 billion for the year ended December 31, 2014 compared to the prior year due to net outflows reflecting
elevated surrenders on products sold through third parties where rates have reset lower. The average fixed annuity crediting
rate excluding capitalized interest decreased to 3.0% for the year ended December 31, 2014 compared to 3.6% for the
prior year reflecting the re-pricing of the five-year guarantee block.
Benefits, claims, losses and settlement expenses, which exclude the market impact on variable annuity guaranteed
benefits (net of hedges and the related DSIC amortization) and the DSIC offset to net realized investment gains or losses,
decreased $35 million, or 7%, to $463 million for the year ended December 31, 2014 compared to $498 million for the
prior year primarily due to a $21 million decrease in expense related to the 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 and the impact of unlocking, partially offset by an increase in expense of $26 million related to
higher reserve funding driven by the impact of higher fees from variable annuity guarantee sales in the prior year where the
fees start on the first anniversary date. Benefits, claims, losses and settlement expenses for the year ended December 31,
2014 included a $5 million expense from unlocking primarily reflecting lower than previously assumed interest rates,
partially offset by a benefit from updating our variable annuity living benefit withdrawal utilization assumption. 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.
Amortization of DAC, which excludes the DAC offset to the market impact on variable annuity guaranteed benefits and the
DAC offset to net realized investment gains or losses, increased $124 million to $235 million for the year ended
December 31, 2014 compared to $111 million for the prior year primarily due to the impact of unlocking. Amortization of
DAC for the year ended December 31, 2014 included a $17 million expense from unlocking primarily driven by lower than
previously assumed interest rates, partially offset by favorable persistency and mortality experience and a benefit from
updating our variable annuity living benefit withdrawal utilization assumption. Amortization of DAC for the year ended
December 31, 2013 included an $81 million benefit from unlocking primarily driven by higher than previously assumed
interest rates and changes in assumed policyholder behavior.
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