AM Best Affirms Credit Ratings of Ameriprise Financial, Inc. and Its Subsidiaries

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating (FSR) of A+ and Long-Term Issuer Credit Ratings of “aa-” for RiverSource Life Insurance and its subsidiary. These ratings reflect Ameriprise Financial's strong balance sheet, robust operating performance, and effective risk management. The outlook for these ratings is stable. However, challenges such as rising interest rates and potential difficulties in long-term care business are noted. The ratings for Ameriprise Captive Insurance are also affirmed with a stable outlook, highlighting its strong performance despite a limited business profile.

Positive

• Affirmed FSR of A+ and Long-Term ICR of 'aa-' for RiverSource Life Insurance Company.
• Strong balance sheet strength assessed as very strong.
• High return-on-equity ratios and accretive earnings to capital growth.
• Effective enterprise risk management practices mitigate balance sheet risks.
• History of returning capital to shareholders.

Negative

• Challenges from rising interest rates may impact long-term care business.
• ACIC's business profile is limited due to serving only one customer.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of RiverSource Life Insurance Company (Minneapolis, MN) and its wholly owned subsidiary, RiverSource Life Insurance Co. of New York (Albany, NY). These companies represent the key life/health (L/H) insurance subsidiaries of Ameriprise Financial, Inc. (Ameriprise) (headquartered in Minneapolis, MN) [NYSE: AMP] and are collectively known as Ameriprise Financial Group. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Ameriprise Captive Insurance Company (ACIC) (Burlington, VT), a property/casualty subsidiary of Ameriprise. The outlook of these Credit Ratings (ratings) is stable. In addition, AM Best has affirmed the Long-Term ICR of “a-” (Excellent) and the existing Long-Term Issue Credit Ratings (Long-Term IRs) of Ameriprise. The outlook of these ratings is stable. Please see below for a detailed listing of the Long-Term IRs.

The ratings of Ameriprise Financial Group reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). The group’s operating performance has remained favorable through 2022 and continues to maintain a trend of high return-on-equity ratios on a statutory reporting basis. Earnings have been accretive to capital growth. While rate increases on the group’s long term care business and economic risks from interest rates rising may present challenges, robust ERM practices mitigate balance sheet risks. Ameriprise has executed on reinsurance transactions on specific lines of business to generate excess capital, improve interest rate risk, improve asset-liability management, while keeping earnings consistent. At the holding company level, Ameriprise maintains moderate financial leverage with good interest coverage. Both measures are within AM Best’s guidelines for Ameriprise’s current ratings. Ameriprise does have a history of returning capital back to shareholders.

Ameriprise’s life and annuity business is complemented by the enterprise’s larger asset management businesses in the United States and internationally. As a group, the RiverSource companies not only are geographically diversified across the United States, but also offer investment services in addition to life and annuity products. The distribution capabilities are robust through the company’s advisor channel, and the company has achieved innovative delivery and operating efficiencies through its investments in technology.

The ratings of ACIC reflect its balance sheet strength, which AM Best assesses as very strong as well as its strong operating performance, limited business profile and appropriate ERM. ACIC benefits from rating enhancement due to its strategic importance as a single-parent captive insurance provider.

The captive has generated strong operating performance as demonstrated by its five-year average pre-tax return on revenue and equity ratios that compare favorably with the averages for AM Best’s commercial casualty composite. Additionally, ACIC benefits from a very low expense ratio.

AM Best assesses ACIC’s business profile as limited due to its narrow market focus as a single-parent captive serving just one customer (its parent) for a limited amount of exposure. ACIC provides various coverages to its parent in the form of errors and omissions policies, a workers’ compensation deductible reimbursement policy, fidelity bonds and property terrorism (conventional and nuclear, biological, chemical or radiological).

The following Long-Term IRs have been affirmed with stable outlooks:

Ameriprise Financial, Inc.-
— “a-” (Excellent) on $750 million 4.00% senior unsecured notes, due 2023
— “a-” (Excellent) on $550 million 3.70% senior unsecured notes, due 2024
— “a-” (Excellent) on $500 million 3.00% senior unsecured notes, due 2025
— “a-” (Excellent) on $500 million 2.875% senior unsecured notes, due 2026
— “a-” (Excellent) on $500 million 4.50% senior unsecured notes, due 2032

The following indicative Long-Term IRs have been affirmed with stable outlooks under the current shelf registration:

Ameriprise Financial, Inc.—
— “a-” (Excellent) on senior unsecured debt
— “bbb+” (Good) on subordinated debt
— “bbb” (Good) on preferred stock

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221103005920/en/

Wayne Kaminski

Senior Financial Analyst – L/H

+1 908 439 2200, ext. 5061

wayne.kaminski@ambest.com

Fred Eslami

Associate Director – P/C

+1 908 439 2200, ext. 5406

fred.eslami@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Al Slavin

Communications Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What are the latest ratings for Ameriprise Financial (AMP)?

AM Best has affirmed Ameriprise Financial's long-term ICR of 'a-' and Financial Strength Rating of A+ for its subsidiaries.

What does the stable outlook mean for Ameriprise Financial's ratings?

The stable outlook indicates that AM Best expects no significant changes in the company's financial condition that could affect its ratings in the near future.

How does Ameriprise Financial manage its financial risks?

Ameriprise Financial employs robust enterprise risk management practices to mitigate balance sheet risks, including potential challenges from rising interest rates.

What challenges does Ameriprise Financial face according to the latest rating report?

Challenges include economic risks from rising interest rates and difficulties related to long-term care business.